SK Telecom, the flagship affiliate of SK Group, will turn itself into an intermediate holding company of the group this year to become a general ICT company like SoftBank in Japan.
Park Jung-ho, president of SK Telecom, pledged to finalize the company’s conversion into an intermediate holding company this year in a press conference held at the venue of CES 2019 in Las Vegas on Jan. 8 (local time).
SK Telecom is seeking to become an intermediate holding company to sharpen the competitiveness of its subsidiaries. Its goal is to become a holding company in the ICT sector while still doing business as a mobile service provider.
Park used CES 2019 as an opportunity to expand SK Telecom’s partnerships with domestic and foreign companies. He met officials from Korean ICT companies and U.S. media firms to discuss ways to promote cooperation in 5G and mobility.
Korean analysts say that SK Hynix, an affiliate of SK Telecom, holds the key to SK Telecom’s conversion into an intermediate holding company. As the Fair Trade Commission has decided to raise a holding company’s mandatory stake ownership in an affiliate to 30 percent, SK Telecom needs to acquire additional equities in SK Hynix. At the moment, SK Telecom is holding a 20.07 percent stake in SK Hynix, meaning that it needs to secure an additional 10 percent stake to meet the Fair Trade Commission's requirements. SK Telecom needs to raise about 5 trillion won in cash to increase its stake in SK Hynix to the required level, industry watchers say.