The South Korean operator announced that the new holding company will be responsible for subsidiaries including memory chip business SK hynix Inc and e-commerce firm 11Street Co.

In a shareholder’s meeting last month, SK Telecom’s CEO, Park Jung-ho, said that the company would look to overhaul its governance, following a number of years of stagnant growth. Now, it seems that the winds of change are indeed blowing, with the Korean operator announcing that it will spin off its non-mobile-related subsidiaries into a new holding company, tentatively named simply ICT Investment.

“The company expects the spin-off to create an opportunity for the telecommunications, semiconductor and New ICT businesses to be properly valued in the market,” said SK Telecom in a statement. “The surviving company and the spin-off company will each build a management structure fit for the business to facilitate future growth and provide investors with two separate investment options.”

The new spin off will include a large number of subsidiaries across a large number of industries, with major names including memory chip manufacturer SK hynix Inc, e-commerce firm 11Street Co, and ride-hailing company T Map Mobility. These are all major companies in their own right, in total contributing around 24% of SK Telecom’s operating profit in 2020.

The holding company will reportedly have two major roles. Firstly, it will focus on aggressive investments in the semiconductor market to carve out market share, something which SK hynix had been pursuing for some time. The subsidiary itself purchased Intel’s NAND memory business last year for around $9 billion.

Secondly, the holding company will reportedly oversee the initial public offerings (IPOs) of its subsidiaries, many of which, such as those for 11Street and T Map Mobility, have been under discussion for some time. Back in February, SK Telecom in fact set up a task force to explore its options with these and other subsidies. Any funds raised by the IPOs would be funnelled into semiconductor investments, both at home in South Korea and abroad.

With SK Telecom’s assets thus divided, it will leave the surviving company to focus on its mobile business, as well as to continue expanding their investments in AI, cloud, and data centres. 

The spin off is subject to approval from the board of directors and shareholders, but is expected to be completed by the end of the year.


Want to keep up to date with the latest developments in the world of telecoms? Subscriber to receive Total Telecom’s daily newsletter here  

Also in the news:
Virgin Media–O2 merger gets provisional green light from CMA
Maximising existing infrastructure: devolo’s any-wire approach to FTTH
Italy to boost broadband spending as plan for single network falters