SK Telecom ranked first in “AI indicators” amongst 12 major telecommunications companies from around the world in a study conducted by U.K.-based market research firm Omdia. In a written interview with the Chief Analyst of the report, Omdia’s Matthew Reed shares his evaluation of SK Telecom’s transformation into a tech company and his views on the company’s AI strategy and future prospects.
* This article contains the opinions of other companies and may differ from SK Telecom’s official position.
SK Telecom’s AI competitiveness, ranked #1 among the global top 12
U.K.-based market research firm Omdia evaluated 12 global telecommunications companies across a total of 10 indicators in their ‘Telco-to-Techco Strategies Benchmark Report’. The purpose of the study was to examine how well the telecommunications companies are progressing in their transition from traditional telecommunications businesses to tech companies. Telecommunications companies representing each country and continent, including AT&T, Deutsche Telekom, NTT Docomo, China Mobile, and e& were subject to evaluation, and SK Telecom was the only Korean telecommunication company.
SK Telecom ranked #1 in AI competitiveness (tied with Japan’s NTT Docomo) in the “AI indicators” section of the study amongst 12 of the world’s major telecommunication companies. SK Telecom ranked 3rd among 12 companies when the scores of the 10 indicators were totaled.
Matthew Reed, Chief Analyst at Omdia says, “SK Telecom stands out for the way it has put AI at the heart of its strategy and for its comprehensive plans to implement AI”
Q. What made you interested in Telco-to-Techco Transition?
The traditional telecom operator business model is under pressure because revenue in the sector is typically growing at a low rate. Many telcos will need to change their business model if they are to maintain or improve their financial performance. One option for telcos is to move towards the techco model, which requires a telco to become an increasingly software-based organization, develop its portfolio of enterprise digital services, and be able to deliver digital transformation solutions for specific vertical industries.
Q. Tell us why Asian Telcos were rated highly in your survey of major Telcos?
Asian operators took the top three places in Omdia’s telco-to-techco benchmark for 2024, with China Mobile ranked first, NTT second, and SKT third, out of the 12 major operator groups from around the world covered by the study. The three leaders got good scores across the multiple factors in the benchmark, which included progress to being a software-based organization; enterprise digital services portfolio and performance; ability to deliver digital transformation for clients; vertical-markets focus; impact of partnerships; adoption and impact of AI; and R&D. The strong performances reflect strategies and actions taken by those leading operators. Local market circumstances including industrial policy might also facilitate their moves into technology sectors.
Q. What are your thoughts on SKT?
SKT has put AI at the center of its plans, with its stated objective of becoming a global AI company through AI-based innovation in infrastructure, operations, and services, under its AI Pyramid Strategy. That’s a bold move and ambition.
Q. You gave SKT (along with NTT) the highest score in your AI metrics. What about SKT’s AI strategies impressed you the most?
SKT stands out for the way it has put AI at the heart of its strategy and for its comprehensive plans to implement AI, which range from developing its own AI semiconductors and LLMs to new services such as A.(Adot), the AI-based digital assistant. SKT is also a founding member of the Global Telco AI Alliance and is working with and investing in leading AI specialists such as Anthropic.
Q. What do you think about the direction of SKT’s ‘AI pyramid strategy’?
AI including Generative AI is poised to bring profound change to business and society. With its AI Pyramid Strategy, SKT is making a clear move to embrace that change and put itself in a good position to take advantage of the opportunities that could arise.
Q. What is your evaluation of SKT’s AI business, in terms of strategies, execution and business?
While it is a little early to expect to see substantial business results from SKT’s AI activities, I am impressed by the scale of SKT’s ambition in AI and the way it is driving forward its AI plans across multiple dimensions, including technology, skills, services, and partnerships.
Q. What do you think the role of Telcos will be in the AI era?
For telcos, AI is set to have a big impact on networks, operations, customer relationship management, and sales and marketing. AI will also change the development of products and services and could enable entirely new services. A challenge for telcos will be whether and to what extent they can develop AI-based services beyond the telecom sector.
Q. What are your expectations and outlook for SKT in this AI era?
SKT has made a bold move to put AI at the core of its strategy and it is well placed to seize some of the opportunities that AI will bring in the telecom market and beyond.
