SK Telecom (US:SKM)2024-05-08 17:14Financial Data and Key Metrics - Consolidated revenue for Q1 2024 was KRW 4,474.6 billion, up 2.3% YoY [10] - Operating income was KRW 498.5 billion, similar to the previous year [10] - Net income was KRW 361.9 billion [10] - Non-consolidated revenue was KRW 3,188.7 billion, up 2.3% YoY [10] - Non-consolidated operating income and net income were KRW 436.4 billion and KRW 492.1 billion, respectively [10] Business Line Performance - Data center revenue grew 26% YoY, driven by increased utilization rates [11] - MNO business had 15.93 million subscribers, accounting for 70% of the total subscriber base [14] - SK Broadband's pay TV and broadband subscribers reached 9.59 million and 6.99 million, respectively [14] - Enterprise business grew approximately 10% YoY, with cloud business revenue up nearly 40% [15] - Enterprise AI business, including big data and Vision AI, grew more than 10% YoY [15] - ifland MAU reached 2.46 million, with average user duration increasing to 90 minutes [18] - T Universe MAU exceeded 2.6 million, driven by the popularity of the YouTube premium package [18] Market Performance - The company is expanding its Global Telco AI Alliance (GTAA), which includes 1.3 billion subscribers across 50 countries [13] - Roaming usage grew 1.6x YoY compared to Q1 2019, with family roaming subscribers increasing 46% QoQ [48][55] - The company expects roaming usage to grow further in 2024, driven by family roaming and youth plan promotions [48][55] Strategic Direction and Industry Competition - The company is transitioning to become a global AI company, focusing on the AI Pyramid Strategy [8][9] - The AI Pyramid Strategy includes AI infrastructure, AIX (transforming MNO and enterprise businesses), and AI services [26][27][43] - The company is collaborating with SK Group entities to enhance AI data center capabilities, including liquid immersion technology and AI chips [12] - The GTAA aims to develop a telco-specific large language model (LLM) and expand globally [13][53] - The company is targeting the B2B market with AI products like TransTalker and AI Copywriter [46][64] Management Commentary on Business Environment and Future Outlook - The company is committed to maintaining stable cash dividends while balancing investments for growth [3][29] - The new shareholder return policy aims to return more than 50% of adjusted net income on a consolidated basis [19][29] - The company plans to improve profitability and efficiency through AI technology in its fixed and mobile business [14][52] - The company expects to achieve economies of scale and strengthen negotiating power against big tech companies through the GTAA [13][53] - The company is optimistic about the roaming business, expecting 2024 to be the first year since the pandemic where outbound travel reaches 2019 levels [45][57] Other Important Information - The company announced a medium-term shareholder return policy, with a DPS of KRW 831 for Q1 2024, the same as the previous year [19] - The company is planning to double its data center capacity to over 200 megawatts by 2030 [63] - The company is focusing on multi-cloud and AI cloud business growth, driven by the popularity of ChatGPT [63] Q&A Session Summary Question: Capital Allocation and AI Investment - The company is balancing shareholder returns with investments for growth, particularly in AI [23][24] - The company plans to allocate resources for AI investments while maintaining a stable dividend trend [29][32] - The size of AI investments will depend on opportunities that align with the company's AI strategy [54] Question: MNO Business Strategy - The company is focusing on pricing and differentiated services to grow the MNO business [25] - AI technology will be used to enhance operational efficiency and customer experience [25][52] Question: AI Pyramid Strategy Achievements and Plans - The GTAA has been launched with founding members including Deutsche Telekom, e&, Singtel, and SoftBank [53] - The company plans to expand the GTAA and develop a telco-specific LLM [13][53] - The company is targeting global expansion of its AI services, including the PAA (Personal AI Assistant) [27] Question: Roaming Business Outlook - Roaming usage has grown significantly, with family roaming subscribers increasing 46% QoQ [55] - The company expects further growth in roaming usage in 2024, driven by promotions and differentiated services [48][55] Question: Enterprise Business Performance - Enterprise revenue grew 9% YoY in Q1 2024, driven by data center utilization and cloud contracts [59] - The company expects continued growth in the data center and cloud business, with a focus on multi-cloud and AI cloud [63] Question: Shareholder Return Policy - The new shareholder return policy aims to return more than 50% of adjusted net income on a consolidated basis [19][29] - The company will maintain a stable dividend trend and consider share buybacks when the stock is undervalued [3][29]