SK Telecom (US:SKM)2024-11-06 23:34Financial Data and Key Metrics Changes - Consolidated revenue for Q3 2024 was KRW 4,532.1 billion, an increase of 2.9% year-over-year, driven by stable growth in roaming and B2B solution businesses [8] - Operating income rose to KRW 533.3 billion, up 7.1% year-over-year, attributed to cost stabilization in marketing and depreciation [8] - Net income decreased to KRW 280.2 billion, reflecting a 9% year-over-year decline due to nonoperating losses [21][9] Business Line Data and Key Metrics Changes - Data center revenue grew by 14% year-over-year, benefiting from higher utilization [10] - The enterprise business maintained an 8% year-over-year growth, while the cloud business saw a 30% increase in revenue [15] - 5G subscribers reached 16.58 million, accounting for 73% of the total subscriber base, with a net addition of 350,000 in Q3 [14][43] Market Data and Key Metrics Changes - The demand for AI data centers is exceeding supply, indicating a strong market opportunity [10] - The enterprise AI business is expected to grow significantly, with meaningful orders being secured [15] - The B2C service market is shifting towards subscription models, creating new opportunities for telecommunications companies [7] Company Strategy and Development Direction - SK Telecom is focusing on an AI Pyramid Strategy, aiming to become a global leader in AI data centers, B2B, and B2C services [4][5] - The company plans to establish an AI infrastructure super highway to enhance Korea's AI ecosystem [11] - The 2030 target includes total revenue of KRW 30 trillion, with AI contributing 35% [24][55] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of nonrecurring valuation losses on net income but emphasized that these will not affect dividend calculations [21] - The company remains committed to maintaining a stable dividend trend, which is crucial for corporate valuation [20] - Management expressed confidence in the growth potential of AI markets and the company's ability to capitalize on these opportunities [54] Other Important Information - The company has established a partnership with Lambda for AI data centers, with plans to deploy thousands of GPUs [47] - SK Telecom is actively developing a telco-specific LLM in collaboration with the Global Telco AI Alliance [12] - The company is enhancing its AI services, with significant upgrades to its A. platform and a successful promotion of the Perplexity Pro model [13][35] Q&A Session Summary Question: Impact of nonoperating losses on year-end dividend - Management clarified that nonrecurring valuation losses will not affect the calculation of funds for dividend payout, maintaining a commitment to stable dividends [21][20] Question: Corporate value-up plan and index inclusion - Management explained the rationale behind the corporate value-up plan and expressed intentions to enhance corporate value to be included in the Korea Value-up Index in the future [26][24] Question: AI's contribution to earnings and service development - Management detailed the AI Pyramid Strategy focusing on AI DC, AI B2B, and AI B2C as key areas for monetization, with expectations for significant growth [28][31] Question: Promotion of Perplexity Pro and its market response - The promotion was successful, leading to a large number of new customers and strengthening the partnership with Perplexity for future AI product development [37][39] Question: Impact of flagship handset series on 5G subscribers - The launch of new flagship handsets contributed to a net addition of 350,000 5G subscribers, with effective marketing strategies playing a crucial role [43][44] Question: Updates on cooperation with Penguin Solutions for AI DC - Management confirmed plans to open the first AI data center in the Asia Pacific region in December, with a focus on GPU as a Service [47][48]