Telecom stock to watch: SK Telecom Co Ltd (NYSE: SKM)

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SK Telecom Co Ltd (NYSE: SKM) stock slightly rose over 0.5% on 13th September, 2019 (As of 12:09 pm GMT-4; Source: Google finance) as the company recently announced that it has signed a Memorandum of Understanding (MOU) with Samsung Electronics to jointly develop and commercialize the world’s first 5G-8K TV. The 5G-8K TV will revolutionize users’ television-watching experience by directly receiving 8K video over SK Telecom’s ultra-low latency and ultra-wideband 5G network. 8K (7680×4320 resolution) is the highest resolution currently in existence, a fourfold enhancement of UHD standard. SK Telecom plans to apply Mobile Edge Computing and Network-Based Media Processing to its 5G network to realize seamless transmission of 8K video. Samsung Electronics will apply its 8K AI Upscaling and next-generation codec technologies to upgrade full HD and UHD images to 8K resolution. The company will also equip 8K TVs with 5G dongles to support direct transmission of 8K resolution video content. Viewers will be able to watch video content of POOQ and oksusu at 8K resolution.  The two companies have also agreed to jointly evolve 5G-8K TV further to deliver a new user experience by working together in the areas including eSpace, SK Telecom’s hyper-space platform for replicating the real world in cyberspace, and 5G Sero TV, a 5G-based television that can be rotated both horizontally and vertically to provide a smartphone-like UX for TV users. Further, they plan to develop B2B business models in areas of smart office and digital signage by adding 5G connectivity to televisions and displays.

On the other hand, during the second quarter of 2019, on the consolidated basis, SKM’s revenue and operating income increased by 2.4% and 0.1% respectively, quarter-on-quarter (QoQ). With a revenue turnaround in mobile communications business and sustained growth in media, security and commerce businesses, SK Telecom achieved improved earnings compared to the previous quarter. Net income decreased by 30.7% QoQ due to decreased equity method gains from SK Hynix. Since launching the world’s first 5G smartphone service on April 3, 2019, SK Telecom has taken up the largest 5G market share in Korea by securing 530,000 5G subscribers as of the end of June 2019. The company expects the number of its 5G subscribers to surpass 2 million this year. Backed by its customer value innovation programs consistently implemented since 2018, SK Telecom has achieved a low churn rate of 0.9% and added about 100,000 new subscribers in the second quarter of 2019.

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