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SK Telecom outlines IoT strategy and plays up IPTV performance

SK Telecom IoT launch

SK Telecoms has outlined its IoT strategy focusing on energy, public services, manufacturing, autonomous vehicles and the connected home.

Speaking during its quarterly earnings call, the Korean telco has big ambitions for the industry sub-sector, which it believes will be worth in the region of $12.6 billion by 2020. Energy, public services, manufacturing and autonomous vehicles will be the long-term objectives of the business, however the team has already launched a number of connected home initiatives throughout the country, including in Dongtan New Town.

“In early July we became the first company in the world to commercialize a hybrid network dedicated exclusively to IoT,” said CFO Keun-Joo Hwang. “Remote reading of gas and electricity meters, lighting management and emergency notification services for schools and manhole control are areas that will be commercialized first.”

The company has reported a successful launch for its connected home offerings and plan to reach 4 million IoT accounts by the end of 2017. IoT is set to be a core factor of the success of the business over the next few years, and will likely impact the influence SK Telecom has in the region.

“The overall IoT strategy direction for SK Telecom would be rather than focusing on securing short-term revenue, we want to utilize the IoT business so that we can first of all secure greater data, and secondly develop and attempt various business models related to the IoT business and thirdly create an ecosystem in partnership with various third-parties which will enable us to achieve the first and second gold,” said Gwang-Seok Shin, Head of the IoT Solution Division. “And by doing so, we will focus on creating actual business models and monetization after that.”

The IoT strategy is also partly reliant on the success of SK Telecom’s T-Map, a mobile navigation application which was recently been made free for all users. Since that announcement, the offering has been expanded into various applications including T-Map Taxi and T-Map Public Transportation as well as car insurance premium discount services based on driving patterns. Aside from being one of the offerings which can enhance SK Telecom’s position in the burgeoning autonomous vehicles market, T-Map also has the potential to strongly support the growing data business.

IPTV weighs in with healthy growth

Another area of success over the last twelve months has been IPTV, despite a sluggish performance from SK Broadband which only reported 0.3% growth. The media solutions business is another which has been prioritized for growth in an industry which is being heavily disrupted by fast-growing OTT brands.

The team said the IPTV business acquired 280,000 net new customers during the period, the highest in the market, now standing at a total of 3.7 million subscribers. The mobile media service, Oksusu, is also seeing a surge in popularity, accounting for 3.1 million unique visitors across June.

“SK Broadband’s IPTV business, the heart of our media platform strategy has enhanced its fundamental competitiveness and is producing stronger results,” said Keun-Joo Hwang. “During the first half of this year, it acquired 280,000 new subscribers in net terms, the highest in the market. The mobile media service, Oksusu, is seeing more unique visitors and longer usage hours thereby contributing to the revenue growth. Through stronger content and mobile competitiveness the company will continue to further expand the foundation for business as a media platform company.”

Growing the company’s content capabilities is a top-priority for the business, though this will come as little surprise for those familiar with the situation, as the team has been attempting to acquire cable TV operator CJ HelloVision. This deal has been turned away by the country’s Fair Trade Commission on the grounds the deal would undermine competition in the sector. The deal would have been worth in the region of $430 million, was strongly opposed by rivals KT and LG Uplus.

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