[넘버스]SKT’s fun of’New ICT’… strengthening all aspects of the cloud business

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Now is the era when mobile carriers show off their wireless speed or coverage. In Korea, which is already recording a penetration rate of more than 120% of the population (Ministry of Science and Technology, Information and Communication), it is time for mobile operators to discover new foods other than wireless for continued business growth. In this respect, 2020 was the year of notable non-communication business performances for all three domestic mobile telecommunication companies, including SK Telecom, KT, and LG Uplus, under the slogan of’de-communication’. Also, it is predicted that this will become more serious in 2021. In the case of SKT, cloud is expected to be added this year to the media, commerce, and security business classified as’New ICT’.

SKT’s 2020 New ICT Business (Media, Security, Commerce) Performance (Source = SKT)

SKT announced on the 16th that it will be the first to build a my data cloud with SC First Bank. My Data is a service that allows individuals to directly integrate and manage financial information scattered in several places. Through this, it is possible to grasp and manage the subscription details and asset details of financial products that were distributed by company at a glance. You can also get more sophisticated asset management services tailored to each individual.

First, the two companies plan to build a storage that can store data such as My Data, personal asset management data, and solution analysis results in SC Cheil Bank’s cloud. Next, we plan to build △cloud infrastructure △mydata analysis system △mydata API data lake to help efficient collection and analysis of personal information.

The fact that the conservative financial world, especially the No. 1 financial sector, started to adopt My Data Cloud means that soon competitors will also rush to introduce related systems. The size of the related industry is also considerable. The size of the domestic data industry market in 2019, as estimated by the Ministry of Science and ICT, is 19,273.6 billion won in 2020, and is expected to reach more than 20 trillion won last year and this year. Among them, the growth of the financial sector, where the my data business was first allowed, is particularly anticipated, and SKT, which showed its presence in this field first, will take advantage of the competition in the my data cloud business in the future.

In fact, in the meantime, SKT’s cloud business has not been mentioned as important in performance announcements. However, related blueprints have been steadily drawn since last year. When SKT CEO Park Jung-ho took office in 2017, he declared that he would invest 5 trillion won for 3 years in the new ICT business, so he has shown considerable willingness to discover new businesses such as artificial intelligence (AI) and cloud.

This was also seen as a real achievement. According to SKT’s 2020 business results announced on the 3rd, the operating profit of the New ICT division is KRW 326.2 billion. The proportion of the total operating profit was 24%, an increase of 10%p from 14% in 2019, and the growth rates of all sub-businesses are showing an even balance of more than double digits.

SKT’s major cloud business in 2020-2021 (Image = Blotter)

The time when SKT began to expand its cloud business in earnest is May 2020. SKT secured a stake by investing 37 billion won in Bespin Global, a global cloud management (MSP) company at the time. Bespin Global, which invested at this time, is emerging as a key partner in the development of SKT’s cloud business, including participating as a partner of Microsoft in this SC First Bank My Data Cloud project. In addition, CEO Park emphasized at the head office town hall meeting in June of the same year, “Even if it seems to be a loss right now, we must make changes to transform all new businesses into AI and cloud.”

After Park’s order, SKT begins to establish a service base that spans all aspects of the cloud business, including B2B (business-to-business transactions) and B2C (consumer transactions). First, in the B2B field, after several months of collaboration with Amazon Web Service (AWS), the world’s number one cloud provider, we succeeded in commercializing the’SKT 5GX Edge’ service in December 2020. By using this service, the signal processing delay time can be reduced to 60% level through AWS-based’Wave Length Zone’ at SKT’s telecommunications office, without going through the Internet or regional integration site when an app connects to the cloud. In order to send and receive data using 100% of the strength of 5G,’ultra-high speed’, it is important to keep the network response rate as low as possible.

In November of the same year, SKT announced that it applied its own cloud management platform’Taco’ to its affiliate SK Broadband Btv service, reducing total system cost of ownership (TCO) by more than 50% and improving productivity by more than 30%. Also, at the same time, we succeeded in developing the next-generation cloud core network with Samsung Electronics. The core network has the advantage of being much more flexible in the deployment and operation of 5G services from the customer’s point of view because the core network supports the’cloud native’ method that supports the deployment of application functions in modules and the immediate resource allocation for specific traffic-heavy sections.

In the B2C field, we are mainly pushing 5G-based cloud gaming. Cloud Gaming is a service that allows users to enjoy games installed on the cloud in a streaming method regardless of the specifications of their own device. Among ordinary consumers, it is regarded as the content that can directly experience the utility of the cloud. In September 2020, SKT partnered with Microsoft to officially launch ‘5GX Cloud Game’, where you can enjoy 100 kinds of high-end Xbox games in the cloud, aiming to reach 1 million subscribers within 3 years. In addition, the SC Cheil Bank My Data Cloud construction project will ultimately benefit general consumers.

6 cloud projects that SKT will focus on in 2021 (Source = SK Telecom)

Looking at the cloud moves that SKT has prepared, we can see that a fairly balanced preparation is being made from the beginning, including core hardware and software infrastructure, enterprise management solutions, and services for consumers. It is a paving stone to become an all-round cloud player by securing core technologies and partners instead of some business areas with guaranteed profitability.

As part of this, SKT plans to actively expand the 5GX Mobile Edge Cloud (MEC) ecosystem this year. In addition, we announced the concept of’SKT 5GX Cloud 6 Projects’. △ Edge Cloud △ Hybrid Cloud MSP △ Cloud Security △ Cloud Network △ Cloud Marketplace △ AI Call Center (AICC).

In addition, each of these businesses can serve as an infrastructure foundation applicable to SKT’s existing five business areas, including MNO (mobile communication), media, security, commerce, and mobility. In the long term, it is interpreted as a strategy that simultaneously improves its own capabilities across the new ICT sector and commercializes that can generate additional profits.

Meanwhile, SKT is planning to achieve 20 trillion won in sales as one of its business goals in 2021. In addition, we promised to transform into a big tech company that combines new technologies such as AI and cloud in all businesses. In addition to the competition for securing wireless subscribers this year, competition in the online video service (OTT) and IPTV sectors, which led the new ICT performance last year, is expected to intensify. As such, it would be worthwhile to look forward to seeing whether the cloud business that has been steadily prepared will be recorded as a major business in the SKT New ICT sector in the 2021 results.