- SK Telecom’s AI Chief highlights the problems of securing and scaling the technology
- A key component of SK Telecom’s AI strategy is its ambition to expand globally
- SK Telecom plans to implement Telco LLM into its AI Contact Center and launch a beta version of Global Personal AI Assistant this year
South Korea’s largest service provider, SK Telecom, is viewed with considerable interest as one of the first telcos striving to become an AI (artificial intelligence) company. It is now in the midst of using AI to transform its internal processes as well as customer engagement.
“We will continue to concentrate on our AI Pyramid Strategy, which entails strengthening our own AI capabilities and broadening collaborations with leading AI companies," SK Telecom's Chief AI Group Officer Suk Geun Chung told Fierce Network. "Ultimately, we aim to become a bridge between customers and cutting-edge AI technologies."
The operator introduced its AI Pyramid Strategy last year, which it believes is “crucial in overcoming the business limitations of the traditional telecom industry.” There are essentially three pillars of this strategy: AI Infrastructure, AI Transformation and AI Service.
On the infrastructure side, SK Telecom is focusing on AI data centers, AI semiconductors and multi-large language models (LLMs). It recently invested $200 million in Smart Global Holdings, an integrated data center solution provider, to advance its ambition to become global AI player.
Chung said it is "preparing a package of data center solutions which combine the capabilities of different SK Group companies. These, as well as "AI semiconductors to enhance the performance of data centers and innovative solutions such as liquid cooling technology will also be commercialized. We will also apply AI to data center infrastructure management to improve operational efficiency," he noted.
The company is also developing a telco LLM in collaboration with OpenAI and Anthropic, which has learned Korean telecoms terminology for things like price plans and memberships, as well as the internal guidelines of the company.
SK Telecom plans to implement the telco LLM into its AI Contact Center (AICC) this year to improve operations. “Internal tests showed that employee satisfaction increased from 44% with general models to 77% with Telco LLM, with expectations of reaching 90% as the model evolves,” Chung said.
It is also in the process of preparing a Personal AI Assistant (PAA) and plans to launch the beta version later this year. This will target the global market and will involve the use of multiple LLMs.
To grow its AI capabilities even further, the company is forming additional partnerships. It recently invested $10 million in U.S.-based AI startup, Perplexity. In turn, Perplexity agreed to invest in SK Telecom's Global AI Platform Co subsidiary. Perplexity will help SK Telecom in developing an AI search engine for its Personal AI Assistant service.
The operator also invested in AI GPU company Lambda earlier this year and Anthropic, another U.S.-based AI company, last year.
Challenges
The road to transforming from a telco to an AI company involves several challenges, which are compounded because there is no precedent.
“The first challenge is securing the necessary technology. To overcome this, we have focused on developing our own LLM, recruiting top-tier engineers, and investing in partners with advanced AI capabilities," Chung explained.
He continued: "The second challenge is the commercialization of our AI technology on a global scale. To address this, we have established a vehicle for agile and rapid collaboration with startups through our Silicon Valley subsidiary, Global AI Platform Co, which allows us to bring our AI innovations to the global market effectively."
Apart from developing its own telco LLM, SK Telecom is also part of the Global Telco AI Alliance (GTAA) to develop a multilingual telco LLM that meets the specific requirements of telecom service providers. Deutsche Telekom, e&, Singtel and Softbank are all also part of GTAA.
Even as the company moves towards becoming an AI company, it needs to address inherent challenges like bias in AI. To tackle this, SK Telecom follows a governance framework, "T.H.E. AI," which stands for Telco, Humanity and Ethics in AI.
Will AI yield financial growth?
Commenting on how this AI-based transformation will help in their financial growth, Chung said, ”We are confident that this strategic shift will significantly contribute to our long-term profitability and sustainability."
However, he added "Our AI transformation is not just about financial growth. It's also about becoming a more innovative, customer-centric, and sustainable company. We believe that by focusing on these areas, financial growth will naturally follow.”
SK Telecom is not the only one focusing on AI. Other telcos like Singtel and Deutsche Telekom are also working towards using the technology to improve operational and network efficiency and enhance customer relationships.