SKT, SM forge strategic financial partnership for AI business
[THE INVESTOR] South Korea’s largest mobile carrier and entertainment business clinched a financial partnership in a bid to invest in artificial intelligence and future information and communication technology businesses, the two firms announced July 17.
SK Telecom, the No. 1 telecom company here in terms of the number of subscribers, and SM Entertainment, the production company of many Korean pop stars and idol groups including Girls’ Generation, EXO and TVXQ, announced changes in their shareholding structures, which included capital raises in key subsidiaries.
SKT raised 25 billion won ($22.2 million) in its sound device manufacturer subsidiary Iriver and 65 billion won in SM’s content production subsidiary SM C&C. The capital increase made SKT the second largest shareholder of SM C&C with a 23.4 percent stake.
SM Entertainment raised 40 billion won in SKT’s Iriver and 7.3 billion won in SM C&C. SM also became the second-largest shareholder of Iriver with a 20.6 percent stake.
Meanwhile, SKT’s advertising business that had belonged to its subsidiary SK Planet was fully handed over to SM C&C.
“While SK Telecom is in possession of AI and sound effect technologies, SM Entertainment owns intellectual property rights of top-rate stars and content production capabilities, helping contribute to converging the two types of services into ICT content,” the mobile carrier said.
SKT CEO Park Jung-ho has reiterated the importance of partnerships with different industry leaders in order to lead the “fourth industrial revolution.”
“Convergence of ICT technologies with cultural content is key to success,” Park said.
By Song Su-hyun/The Korea Herald (firstname.lastname@example.org)