SK Telecom

SK Telecom Co., Ltd.
에스케이텔레콤주식회사
Public
Traded as KRX: 017670
NYSE: SKM
Industry Telecommunications
Founded April 20, 1984 (April 20, 1984) (as Korea Mobile Telecommunications)
1997 (as SK Telecom)
Headquarters Jung District, Seoul, South Korea
Key people
 Dong Hyun Jang CEO
Products Wireless telecom.
Cellular internet
Internet
Mobile platform
Internet of Things
Revenue Increase $13.601 billion (2010)[1]
Number of employees
 20,955
Parent Korea Telecom (1984–1994)
SK Group (Since 1994)
Subsidiaries see this list
Website www.sktelecom.com

SK Telecom Co., Ltd. (Hangul: SK텔레콤 or 에스케이텔레콤) (full name: Sunkyoung Telecom) is a South Korean wireless telecommunications operator, it is part of the SK Group, one of the country's largest chaebols.

SK Telecom is South Korea's largest wireless carrier, it leads the local market with 50.5 percent share as of 2008.[2] Since its creation in 1984, the company has evolved from a first generation analog cellular system, to second generation CDMA, then to the world's first third-generation synchronized IMT-2000 cellular system. SK Telecom also became the world’s first carrier to commercialize HSDPA in May 2006. SK expanded into the landline market by acquiring second-rated fixed-line operator Hanaro Telecom in February 2008.

The company’s online brands include "Nate," a web portal; "June," a mobile multimedia service; "Moneta," an e-banking mobile app; "Nate Drive," a telematics service and "Digital Home," an online interface to remote-control household appliances.[3]

Online services are offered through tech subsidiary SK Communications, which also dominates the social networks market in South Korea. "Cyworld" is the largest social media site by membership and "NateOn" is the number one instant messaging client.[4]

In 2004, SK Telecom launched "Hanbyul," the world’s first DMB satellite. TU Media, SK Telecom's digital media arm, handles DMB TV broadcasts.

In November 2015 SK Telecom announced signing a deal to acquire CJ HelloVision, the country's largest cable and Internet operator, with the view to merge it with its own cable unit, SK Broadband.[5] The acquisition, which will make SK Broadband the No. 2 paid cable broadcaster following KT,[6] is being opposed by competitors, who charge that the merger will help SK unfairly dominate the market.[7][8]

History

SK Telecom was established in March 1984 under the name Korea Mobile Telecommunications Services Corp. (KMTSC; Hangul: 한국 이동 통신 서비스), but was renamed Korea Mobile Telecommunications Corp. (KMTC; Hangul: 한국 이동 통신) in May 1988. It was a subsidiary of the state monopoly phone company, Korea Telecom (now known as KT Corp.) until KT sold it off in 1993.[9] In June 1994 SK Group (Formerly Sunkyong Group) became Korea Mobile Telecommunications Corporation's largest shareholder. KMTC officially joined the SK Group in January 1997 and changed its name to SK Telecom in March of that year. In October 2000, SK Telecom became the second operator in the world after NTT DoCoMo to launch a commercial 3G service using W-CDMA technology. In January 2002, this was followed up by launching the world's first CDMA2000 1xEV-DO network, offering greatly increased data transmission speeds to preexisting 2G networks.

In May 2005, SK Telecom divested 60 percent of SK Teletech stock to cellphone maker Pantech.[10] SK remains the second largest shareholder by holding on to the rest of Teletech's stock. In 2006, the well-known "SKY" brand of mobile devices became fully owned by Pantech as it finalized its takeover of SK Teletech.

1984–1993: Early Years

Founded on March 29, 1984 as Korea Mobile Telecommunications Services Corp., the state-owned carrier introduced pagers and car phones to the Korean market. May 1984 saw the launch of the car phone service. Korea Mobile changed its name to Korea Mobile Telecommunications Corp. (KMTC) in May 1988. In July, AMPS cellular network was initially launched in Seoul metropolitan area. By 1991 nationwide coverage was complete.

In April 1993, the South Korean government —through KMTC— adopted CDMA as the national cellular telephone system.[11]

1994–1996: Privatization and the CDMA standard

Through privatization, SK Group became Korea Mobile Telecommunications Corp.'s largest shareholder in June 1994.
In October 1994, Korea's first CDMA system was introduced to the public for the first time.

In January 1995, KMTC reached the one million subscriber mark. Korea Mobile Telecommuncations became the third Korean firm to be listed on the NYSE exchange (ADR) in June 1996. Later that year South Korea got its first commercial CDMA (IS-95A) network. Operating in Seoul in October, it is considered one of the world's earliest commercial CDMA networks.

1997–2000: International expansion

SK Group completed its takeover of KMTC in January 1997, as it became the world's sixth carrier to attain ten million subscrptions. Around that time, it also began constructing the Northeast Asian CDMA belt encompassing China, Japan, Vietnam, and the rest of the Asian continent.
In March 1997, to reflect new changes, KMTC changed its name to SK Telecom, and in October, NetsGo, an online service, was launched.

In June 1998, SK Telink, the international call service division, started offering commercial overseas call service. In December 1998, SK Teletech launched its first handset. In April 1999, SK Telecom entered the Mongolian market by co-founding Skytel LLC with nearly 30 percent ownership stake.
TTL, a wireless plan targeting younger users, and nTOP, a cellular internet service were launched in July and October 1999, respectively.
In December 1999, SK Telecom surpassed ten million subscriber mark, the following month, it launched the world’s first commercial CDMA2000 service. By the end of the year the carrier won a contract for asynchronous IMT-2000 (WCDMA) facility.[12]

2001–2007: Cellular internet and market accrual

The new millennium ushered in an era of cross-platform online networks that saw efforts to integrate mobile services, as SK Telecom was exploring new value-creating models such as m-Commerce and satellite DMB Service. In January 2002, an acquisition of Shinsegi Telecomm Inc. was completed.[13] Also in January, the company deployed world’s first commercial synchronous IMT-2000 facility.
In March 2002, the carrier struck international roaming deals between countries using CDMA and GSM networks. An agreement was signed with Israel's Pele-Phone in April to sell proprietary software that will operate on the carrier's existing CDMA network and future 1x-CDMA network.[14] In July, a MoU was signed with China Unicom to establish a joint venture. In November two mobile applications ‘June’ and ‘Moneta’ were launched. In July 2003, S-Fone, a commercial CDMA network became operative in Vietnam. In August 2003, June became the world's first 3G service to have one million subscribers. In February 2004, SK won a contract for a joint venture with China Unicom, called UNISK.

March 2004 marked a new breakthrough with the launch of Hanbyul, the world’s first DMB satellite.
MelOn, an online music store was launched in November 2004. ‘1mm’ and ‘Loview,’ a digital photo frame service were launched in April and November 2005, respectively. By December, MelOn had four million subscribers.

SK Telecom started 2006 with record revenues of KRW 10 trillion ($92.8 billion). In May the world's first commercial HSDPA handset was released. May also saw the carrier's entry into the U.S. wireless communication market with Helio. In June, SK Telecom signed a strategic partnership with China Unicom to purchase CB worth $1 billion in its subsidiary, China Unicom Hong Kong. In the same month SK deployed its WiBro internet network. In April 2007, a project to create TD-SCDMA, China's 3G wireless broadbnad equivalent was signed with the Chinese government. Around that time, S-Fone had two million subscribers in Vietnam.

2008-present: Landline and new technologies

In November 2008 SK signed an agreement to buy a controlling stake of fixed-line phone company Hanaro Telecom for 1.09 trillion won ($1.15 billion) from a consortium led by AIG and Newbridge Capital. The new entity will be the second-largest telecom firm in terms of total assets and revenues next to KT Corp.[15]

In 2013 SK Telecom was the world's first operator to offer a commercial LTE-Advanced network. This coincided with the release of the Samsung Galaxy S4 LTE-A model, which offered a step-up CPU (Snapdragon 800 vs. Snapdragon 600 used in the regular model), and also LTE-Advanced capabilities. SK Telecom supported this handset at launch.[16]

On July 6, 2013, it was reported that Apple was in talks with SK Telecom, to release the iPhone 5s model on SK's LTE Advanced network.[17]

Services

As of September 2012, SK Telecom operates 2G IS-95/CDMA 2000, 3G WCDMA/HSPA+, 4G Mobile WiMAX, and LTE networks.

Frequencies used by SK Telecom's Network in Korea
Frequency Frequency
band 		Frequency
width
(MHz) 		Generation Radio interface Notes
800 MHz (824-829, 869-874) 10 2G CDMA
850 MHz (829-839, 874-884) 5 20 3.9G LTE (main frequency)
1800 MHz (1715-1725, 1730-1735, 1810-1830) 3 35 3.9G LTE
2100 MHz (1930-1940, 2120-2130) 1 20 3.9G LTE
2100 MHz (1940-1960, 2130-2150) 1 40 3.5G UMTS/HSPA
2300 MHz (2300-2327) 27 3.9G Mobile WiMAX

2G network supports CDMA (IS-95A/B), CDMA2000, and EV-DO. EV-DO handsets are marked with its service name "June." 3G network supports WCDMA, HSPA, and HSPA+. SK Telecom has the best HSPA+ coverage in South Korea. HSPA+ is available in 50+ major cities and towns, while KT HSPA+ is available in selected metropolitan areas. 3.9G LTE, which uses both band 5 and band 3, supports multi-carrier technology, which SK Telecom claims to be the first operator to offer.

From May 2005 to September 2012, SK Telecom provided S-DMB through its subsidiary TU Media (later SK Telink). S-DMB service was ceased in September 2012 after significant losses in its final years.[18]

SK Telecom also provides online multiplatform entertainment, business and financial services:

International markets

SK Telecom is currently putting its efforts in expanding into global markets, such as Vietnam, U.S., and China. The company is also forging strategic alliances with other global carriers and IT businesses.

China

In 2000, SK Telecom first entered China, later forming a joint venture with China Unicom for wireless Internet service in February 2004. This joint venture between a foreign and local company, UNISK, is the first of its kind in China.

In 2006, SK Telecom bought $1 billion worth of convertible bonds of China Unicom Hong Kong, a division of China Unicom and agreed to cooperate in joint sourcing of handsets, development of additional services, platform development, marketing and distribution, customer relationship management, and network development. One result of this partnership is jointly developing handsets to be sourced by Samsung, LG, and Motorola.

In August 2006, SK Telecom signed an MoU making it the first non-Chinese company to participate in the TD-SCDMA Project. Under the agreement SK Telecom will work with China's National Development and Reform Commission (NDRC) on development of TD-SCDMA, China's 3G Internet standard equivalent.

United States

Helio

On January 26, 2005, SK Telecom announced that it had formed a $440 million joint venture with Earthlink to form a new U.S. cellular carrier named SK-Earthlink, later that year, the name was changed to Helio. Combined with Earthlink, Helio is expected to offer a variety of advanced mobile devices, many of which are already available in Korea. These models would be refined and updated for use by tech-savvy American consumers, allowing for the first time handsets with functionalities previously unavailable in the U.S. market.

The now-defunct venture operated on the premise of being a mobile virtual network operator (MVNO), using CDMA 1xEVDO network capacity leased from Sprint Nextel. In 2007, SK Telecom began talks to purchase a stake in Sprint Nextel,[19] however by 2008 it had backed away from the deal.[20]

On June 27, 2008, it was reported that Helio was being acquired in an all-stock deal by Virgin Mobile; for a net acquisition price of $39 million —–a far cry from the $500 million originally invested in the venture. All staff were eliminated and the business ceased as a going concern[21]

Mobile Money Ventures

On March 6, 2008, SK Telecom launched Mobile Money Ventures, a joint venture with Citibank. MMV designs, develops, implements, and supports mobile financial services solutions on a global scale. Its Mobile Money Platform can support existing mobile banking services as well as next generation services like P2P payments and NFC payments.[22]

On March 28, 2011, SK Telecom made a surprise bid to acquire bankrupt movie/game rental company Blockbuster Inc. SK bid $284.5 million for Blockbuster, but ended up losing to Dish Network.

SK Telecom Americas Innopartners

On March 4, 2014, SK Telecom announced that its U.S. arm, SK Telecom Americas, Inc. completed the establishment of the startup accelerator SK Telecom Americas Innopartners.[23] The accelerator invests in early stage core technology startups. It is set up to incubate 11 startups at the same time, an currently is hosting three of them (Etopus, N43, Pavilion Data).[24]

Vietnam

Main article: S-Fone

In September 2001, SK Telecom established S-Telecom, through a Business Cooperation Contract (BCC) with SPT (Saigon Postel), a Vietnamese phone company with a CDMA license.

S-Telecom, Vietnam's first CDMA wireless carrier, launched commercial services in July 2003 and has since upgraded its network to CDMA2000 1xEV-DO to meet growing demand. Currently 64 cities including Ho Chi Minh City and Hanoi are served under the S-Fone brand.

As of October 2006, the company was providing EV-DO wireless internet services in five major cities including Hanoi and Ho Chi Minh City. S-Fone subscribers reached two million in April 2007, a little over three years after its start.

Subsidiaries

SK Telecom has a number of subsidiaries that support its growth. In 2006, SK Communications expanded into new markets with an enhanced version of Korea's leading social networking site Cyworld. At home, NateOn is the leading messenger service with more than 13 million users as of 2006. SK Telink, the international telephony division, launched international Korean SMS messaging in the U.S., today it operates in more than 170 countries. TU Media, the nationwide satellite Digital Multimedia Broadcasting (DMB) service, is also making fast growth, attracting over one million subscribers in 2006.

NetsGo

With Thrunet and Hanaro controlling nearly half of the growing high-speed Internet market, SK Telecom entered the market in late 1999 with Dream NetsGo, a cable Internet provider that offered its services in a partnership with local cable TV operator Dreamcity Media. It provided Internet access at a speed of up to 10 Mbit/s using the cable TV network, which had 120,000 subscribers at the time.[25] In 2002 NetsGo merged with Lycos Korea to form SK Communications.

SK Broadband

Main article: SK Broadband

Founded as Hanaro Telecom, Inc. in 1997 and was the only fixed-line and cable operator beside the state-owned KT. It provides local, domestic long-distance and international long-distance fixed-line telephone services to residential and commercial subscribers. After acquiring Thrunet, Korea's second-rated broadband company in 2005, Hanaro became a provider of broadband Internet access service and other Internet-related services, including video-on-demand and IPTV services.
Other Internet-related businesses include intelligent network, Internet leased lines, domestic leased line, VPN, Internet data center, and CDN services. Its new businesses include platform business, business-to-business (B2B) solutions business, healthcare business.
The company's Internet Protocol (IP)-based central exchange system provides Centrex functions (internal calls, customer service numbers, etc.) and offers additional features, such as multiple bell tones, forwarding desk (receptionist function), conference call, call center and voice message functions. It also provides managed services and Information and Communications Technology (ICT) consulting services.[26] Hanaro Telecom was acquired by SK Telecom in 2008 and became a wholly owned subsidiary in mid 2015.[27]

SK Communications

Main article: SK Communications

Founded in 1999 as Lycos Korea,[28] SK Communications is the technology company responsible for some of the most successful internet tools and products in the Korean market. After the company's 2002 takeover by SK Telecom, online portal Nate was launched and has since grown to be one of the most popular portals in Korea. The largest social media site in Korea, Cyworld has seen a sharp rise in its membership, with members reaching 20 million from 16 million in 2005. SK Communications also provides the top instant messaging service NateOn. As of December 2006, NateOn had 13 million users and led the local market. In 2006, the Nate.com portal was revamped as a Web 2.0 user-centric site with an emphasis on personalized content and social networking. Cyworld II also re-launched with Web 2.0 offerings, including a personalized mini-homepage, personalized search, UCC video and other user-customizable Web-based applications.

SK Communications is currently extending its online businesses into the global market. In 2006, localized versions of Cyworld were launched in China, Germany, Japan, Taiwan, the U.S., and Vietnam. To make full use of its premium base, the tech firm is building a portfolio of content providers, including education company Etoos; consumer shopping services under the Cymarket brand, which leverage Cyworld’s network and traffic; gaming subsidiary SK i-media; and Egloos, the leading independent blogging service in Korea. In addition, the company acquired a significant stake (24.4%) in a powerful online search engine, Empas, for KRW 37.2 billion.

SK Planet

SK Planet is the e-commerce division of SK headquartered in Pangyo. Business areas include digital contents, integrated commerce and marketing communication.

Its October 2011 launch marked the reorganization of T Store.[29] SK Planet launched qiip, an app store in Japan.[30] 11st is one of the biggest online store complexes in South Korea under the management of SK Planet.[31] Other products include Smart Wallet, a mobile wallet service, OK Cashbag, an integrated mileage service, and Gifticon, a mobile voucher service. As part of the integrated commerce strategy these services are being combined under the brand Syrup.[32]

On November 14, 2014, SK Planet formed a joint venture with Celcom Axiata Berhad of Malaysia.[33] The new e-commerce company is known as Celcom Planet Sdn. Bhd., its online outlet is called 11street Malaysia.

Main article: SK Telink

Founded in April 1998 as an international telephony service provider, SK Telink has grown into a major player in the international calling market. International call services are offered under the ‘00700’ brand. Building on the commercial long-distance telephony and value-added services launched in 2005, the carrier began offering Korean text messaging in June 2006 in the U.S. The service allows subscribers send and receive Korean text messages in the U.S., as well as to and from Korea.

TU Media

Main article: TU Media

Established in December 2003, TU Media Corp. introduced a new digital media service —satellite Digital Multimedia Broadcasting (DMB). Subscribers can now view satellite TV broadcasts on their portable handsets or via vehicle-mounted terminals. As of December 2006, subscribers to TU Media topped one million, up from 372,000 in 2005. Its nationwide DMB is available on 37 channels, consisting of 16 video, 20 audio and one data, and provides programs on education, games, drama, music, news and culture. In 2006, TU Media launched TUBOX, a pay-per-view movie channel that allows subscribers to see movies prior to DVD release. In addition to South Korea's 84 cities, TU Media provides service in express highways and Seoul metropolitan subways. DMB coverage was later expanded to include the Korea Train eXpress (KTX) Seoul to Busan line, Busan subways and 10 metropolitan Seoul local highways. In 2010 TU Media was merged with another subsidiary, SK Telink —Korea's leading international call service provider. DMB broadcasts ended two years later as it became uncompetitive in the mobile TV market.

iriver

Further information: iriver and ReignCom

iriver Inc. (formerly ReignCom) is a South Korean electronics and entertainment company founded in 1999 by seven former Samsung executives. SK Telecom acquired it from Vogo Fund in 2014.[34]

Employee conditions

SK Telecom has its own workers union. SK Telecom abides by the Korean Labor Law and is executing a retirement age of 58. Unless an employee commits a crime more serious than imprisonment or an act in violation of ethical management of SK Telecom, employees are guaranteed to work until they reach the retirement age. SK Telecom follows a management system called SKMS (SK Management System), created by SK Companies.

See also

References

  1. ↑ "SKM Income Statement". Yahoo! Finance.
  2. ↑ Lee Sun-young (May 5, 2008). "Mobile operators pressured to cut call, message rates". Korea Herald. naver.com. Retrieved May 8, 2008.
  3. ↑ "Brand History". SK Telecom Co., LTD.
  4. ↑ "Evolution of Social Network Service into Media: Cyworld Case (PDF)". SK Communications. October 2008.
  5. ↑ Lee Min-hyung (November 2, 2015). "SKT inks deal to buy CJ HelloVision". Korea Times.
  6. ↑ JEON YOUNG-SEON, KIM JI-YOON (November 2, 2015). "SK Telecom will buy cable firm". Joongang Media Network.
  7. ↑ "SK Telecom Sets out New Vision with Takeover Amid Criticism". Seoul: Kobiz Media Co., Ltd. Korea Bizwire. December 2, 2015.
  8. ↑ 윤경, 현 (2015-12-01). "SKT, CJ헬로비전 인수합병 신청…내년 2월 전 판가름(종합)". Yonhap News (in Korean).
  9. ↑ Whasun Jho (2014). Building Telecom Markets: Evolution of Governance in the Korean Mobile Telecommunication Market. p. 140. ISBN 978-1461478881.
  10. ↑ "Pantech & Curitel Buys Control Of SK Teletech". Phone Factor, LLC. May 4, 2005.
  11. ↑ "CDMA History". CDG.
  12. ↑ Cho Hyung-rae (December 15, 2000). "SK Telecom, Korea Telecom Win IMT-2000 Licenses". The Chosun Ilbo. Chosun.com.
  13. ↑ "Korea approves takeover of Shinsegi". Reuters. April 26, 2000.
  14. ↑ Nadau, Efi (April 30, 2004). "Pele-Phone signs $7m value added service deal with SK Telecom". Globes.
  15. ↑ Jin Hyun-joo (February 21, 2008). "SKT's Hanaro buy gives birth to mobile giant". The Korea Herald.
  16. ↑ Lawler, Richard (June 25, 2013). "SK Telecom launches the world's first LTE-Advanced network, and the Galaxy S4 LTE-A". Engadget.
  17. ↑ Christie, Robert (July 5, 2013). "iPhone 5s Release Date Rumors: New Phone Will Have 4G LTE Advanced Capabilities". Hngn.
  18. ↑ "Satellite DMB soon to become history". JoongAng Ilbo Co.,Ltd. (in Korean). Joins MSN. July 4, 2012.
  19. ↑ Koh Byung-joon (July 25, 2007). "SK TELECOM PUSHING TO ACQUIRE US TELCO SPRINT NEXTEL". Comcast Finance. Retrieved August 3, 2007.
  20. ↑ Dave Hayes (July 17, 2008). "SK Telecom confirms it has no plans to buy Sprint". Retrieved 2011-01-17.
  21. ↑ Ryan Block (June 20, 2008). "Helio's flame going out: stores to shutter, customers heading to Virgin?". The Kansas City Star.
  22. ↑ "Citi: Mobile Venture Will Go Well Beyond Basics." American Banker. March 7, 2008.
  23. ↑ "SK Telecom Growing New Seeds in Silicon Valley". SK Holdings. March 4, 2014.
  24. ↑ "Portfolio". SK Telecom Americas Innopartners.
  25. ↑ "SK Telecom Launches High-Speed Internet Service". Telecompaper. December 3, 1999.
  26. ↑ "SK Broadband Co Ltd- KOSDAQ-033630 Quotes & News". Google Finance.
  27. ↑ "Rating Action: Moody's affirms SK Telecom's A3 ratings on announced acquisition of SK Broadband; outlook remains stable". Moody's Investor Service. March 23, 2015.
  28. ↑ "Company History". SK Communications.
  29. ↑ "Inspiring everyone on the planet". SK Planet.
  30. ↑ SK플래닛, 앱스토어 '킵(qiip)'으로 일본시장 공략 (in Korean)
  31. ↑ 11st Introduction
  32. ↑ SK Planet Set to Change the Dynamics of Offline Commerce Market Valued at KRW 230 Trillion
  33. ↑ "Celcom Axiata Bhd and SK Planet Form Joint Venture Company". Bloomberg.
  34. ↑ SKT Acquires iriver, from the Maeil Business Newspaper
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