SK Telecom, KT and LG Uplus' operating profit is expected to reach 1.23 trillion won in the third quarter, up 14.7 percent from a year earlier, according to market tracker FnGuide.

Analysts estimate KT's operating profit for the July-September period will reach 454.9 billion won, up 41.3 percent from the same period last year.

SK Telecom may post operating profit of 525.1 billion won, showing growth of 5.5 percent year-on-year.

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SK Telecom's virtual assistant application A. (A Dot). Photo: SK Telecom

LG Uplus' operating profit is expected to fall slightly 0.8 percent to 252.3 billion won, as depreciation costs related to a new integrated IT system were booked since last year.

The improvement in performance of all three carriers was due to efforts to transition to new business segments, despite the stalemate in 5G subscriber growth.

According to the Ministry of Science and ICT, the number of 5G subscribers in South Korea reached 33.85 million, accounting for 65.4% of the population. The number of 5G subscribers increased by 1.3% from July to August 2023, but decreased to 0.7% from April to May this year.

In that context, the three major telecommunications companies have been looking for new opportunities in AI services.

According to SK Telecom, the company will hold the SK AI Summit on November 4 to explore ideas for expanding the AI ​​ecosystem.

OpenAI President Greg Brockman, Microsoft Executive Vice President Rani Borkar, and several AI industry experts will travel to Korea to attend the forum, where SK Telecom CEO Ryu Young-sang and SK hynix CEO Kwak Noh-jung will present their AI strategies and provide updates on their product developments.

Recently, SK Telecom has focused its resources on AI services, signing partnerships with global AI companies.

In June, SK Telecom invested $10 million in US AI search engine company Perplexity to upgrade its AI personal assistant A. (A Dot).

In July, the carrier “poured” $200 million into the US company SMART Global Holdings to jump into the data center solutions and end-to-end AI factory business.

To expand domestic infrastructure and meet growing demand for AI services, SK Telecom plans to introduce Nvidia's H100 AI processor into its data centers later this year.

“A Dot had 340,000 daily active users before the upgrade, but that has increased to an average of 490,000 in September, and the company is now considering a paid subscription model,” said Hyundai Motor Securities analyst Kim Hyun-yong. “The AI ​​data center has the greatest potential to expand its business, not only through investments in global companies but also by creating synergies with SK affiliates.”

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LG Uplus AI-based cloud-RAN network verification results. Photo: LG Uplus

KT is also looking to transform itself from a mobile carrier into an AI communications technology company.

The telecom company recently announced a strategic partnership with Microsoft, promising to invest about 2.4 trillion won over the next five years in AI and cloud services.

By the second quarter of next year, KT plans to complete the development of a large-scale language model specific to Korea based on GPT-4o and provide AI solutions suitable for the public and financial sectors using a smaller-scale language model, Phi 3.5.

KT and Microsoft will establish a company specializing in providing AI transformation services for businesses.

The joint venture will provide one-stop services to businesses, helping them build AI environments by leveraging KT's IT capabilities and Microsoft's AI cloud platform.

Starting from Korea, they plan to expand operations to other Asian and global markets.

LG Uplus is also preparing to launch its own ixi model-based AI services.

The company is currently in the final stages of preparing to launch its ixi-O AI personal assistant service by the end of October.

Initially, the service will be available to iPhone users. Depending on customer feedback, it will be considered for expansion to Android.

(According to Korea Times, Yonhap)