Three Mobile Carriers Look to AI for Growth Beyond Telecom, Expand AIDC and AX Businesses

[Financial News] The three mobile carriers are stepping up efforts to secure new growth engines, putting artificial intelligence data centers (AIDCs) and enterprise AI transformation (AX) businesses at the forefront. Their third-quarter results this year showed divergent changes in operating profit due to base effects from one-off items, but AI infrastructure businesses, including AIDCs, all recorded growth. As they expand large-scale data centers and enterprise AI services to overcome the growth limits of their core telecom businesses, competition to monetize AI businesses is also gaining momentum.■ Three Mobile Carriers Wrap Up Earnings Announcements; AIDC Growth in FocusAccording to industry sources, the three mobile carriers had completed their third-quarter earnings announcements for this year on the 10th, with KT reporting last. Operating profit rose at SK Telecom Co., Ltd. (SKT) and LG Uplus Corp., partly due to base effects from one-off expenses last year, while it fell at KT, partly due to the base effect of gains from property sales last year.
KT said during its third-quarter earnings conference call held that day that consolidated revenue for the third quarter this year was KRW 6.9975 trillion and operating profit was KRW 505.3 billion, down 1.8% and 6.1%, respectively, from the same period a year earlier. Operating profit at SKT and LG Uplus Corp. rose by 1,040.3% and 84.1%, respectively.
However, all three companies saw growth in their AI infrastructure businesses. SKT's third-quarter AIDC revenue was KRW 126.1 billion, up 6.2% from the same period a year earlier. LG Uplus Corp.'s AIDC revenue rose 27.7% to KRW 131.7 billion, while its total enterprise infrastructure revenue increased 10.4% to KRW 472.2 billion.
KT also continued to grow its data center business, led by its group affiliate kt cloud. kt cloud's revenue rose 7.7% year over year, while KT's cumulative AX revenue for the first three quarters also increased 11.9%.■ Data Center Expansion Moves Into High Gear; Enterprise AX Businesses Also ExpandThe three telecom companies are also expanding infrastructure over the medium to long term in response to rising demand for AIDCs. They are broadening their businesses beyond supplying AI computing infrastructure to supporting companies in adopting and operating AI. KT plans to expand its AIDC capacity to at least 1 GW (gigawatt) by 2031. It will bring six new data centers online in stages, starting with Bucheon Centers 1 and 2 in 2027, followed by facilities in Gaebong, Gunsan and Yongin in 2028, and Ansan in 2029. In the Seoul metropolitan area, it will focus on sites with power supply and permits secured; elsewhere, it will prioritize securing demand from prospective tenant companies.
SKT is expanding its AIDC business through SK Hyper and SK Horizon, which it established this year. SK Hyper is responsible for developing gigawatt-scale AIDCs, and in Ulsan the company is discussing business terms with three to four global operators. Its goal is to begin bringing data centers online in stages in the second half of 2029.
LG Uplus Corp. is building an AIDC with a power-receiving capacity of 200 MW in Paju-si, Gyeonggi Province. It plans to bring the four buildings online in stages by 2028, and has secured customer demand for all four as it moves ahead with the design and construction of follow-on facilities.
Specific growth targets have also been set for enterprise AX businesses. KT plans to increase AX revenue to at least twice its 2025 level by 2028. SKT is also applying its proprietary AI model to A. and workplace AI services, and revenue from its AI B2B and B2C services rose 27.3% year over year in the third quarter.
[email protected] Yoon Hong-jip Reporter