SK Telecom: New Strategic Formation and Convergence Business Models

SK Telecom has plans to tap into new revenue streams by implementing the next growth strategy program, so called 5nGINE, and aims to secure IPR technologies and applications. This service-driven strategy guided by the logic that corporate strategy for the future should start with a clear understanding of values for consumers and differentiated factor in fast-evolving global mobile service markets is the core part of 5nGINE planned by SK Telecom. 5nGINE strategy entails following technology items:

- 4G Initiatives
- Advanced User Interface: Voice Recognition and Processing in Mobile Phone and E-Paper Display
- Convergence: Mobile in Vehicle (Telematics), Mobile Commerce and Finance, Open Market Place
- Cloud Computing
- Smart Grid

Along with technology development strategy proposed by its 5nGINE, SK Telecom established Innovation Strategy, Management Action Plans, and Business Portfolio Strategy, in order to efficiently support the 5nGINE.

Meanwhile, SK Telecom's oversea direct investment as a mobile network operator is likely to be altered in that SK Telecom continuously has announced retrenched business plans in China, Vietnam, and Kazakhstan. SK Telecom sold all the China Unicom shares, froze the financial investment in its mobile service Joint Venture in Vietnam and decided not to go Kazakhstan mobile markets.

Yonku & Kenkyu believes that SK Telecom's new strategy focusing on convergence business and IPR acquiring is attributable to its disappointed oversea expansion strategy. Recent market-exit from oversea business is closely related with its new strategic formation - 5nGINE.

In this report, Yonku & Kenkyu examined multiple R&D items entailed in SK Telecom's 5nGINE strategy. Most part of items has unique business models and has been developed by the way of proprietary technology. Along with technology items, we focused on business models and strategic aspects that help mobile carriers review their current state.

-4G for SK Telecom, Analysis of lack of commitment to LTE by Korean mobile carriers, Demand and CAPEX discussion, current state of 3G and WiBro in Korea, Possible scenario for LTE deployment

-SK Telecom's new Telematics program - MIV (Mobile in Vehicle), which features user's operation via mobile Phone; Key Differentiated Factors, Functional Features, Business Plans in China

-User Interface for IPRs - Voice Recognition and Processing on Mobile Phone / e-Paper Display; the Motivation of R&D investment, Business Models devised by SK Telecom

-Convergence: Mobile Commerce, Mobile+Finance, Mobile+Online Business, Open Market Places; Business Models and SK Telecom's strategy

Yonku & Kenkyu also analyzed the strategic implications associated with SK Telecom's 5nGINE strategy and recent oversea market-exit strategy: Why SK Telecom decided to pull out Vietnam and China, and instead, changed to service-driven and IPR holder strategy? This research also provides insight into current mobile solution in mobile commerce, convergence business models, consumer and enterprise acceptance to WiBro and data and applications in Korea.

-Why did SK Telecom unveil new strategic formation: from the investment in oversea business to service-driven and R&D for advanced applications?
-What are the reasons for SK Telecom's financial retrenchment in Vietnam and China?
-What are the situation and reasons for the lack of commitment to LTE for Korean mobile carriers?
-When will SK Telecom start LTE and 4G business?
-What are the solutions for enterprise in mobile WiMAX?
-What are key differentiated factors in SK Telecom's new Telematics service - Mobile in Vehicle?
-What is the state of Chinese Telematics markets?
-Why does SK Telecom pursue IPRs in e-Paper and voice recognition technologies?
-What are the business models in mobile commerce, mobile finance, and convergence business in SK Telecom?
-What are the strategic implications in SK Telecom's new vision?"