SK Telecom (017670) will carve out SK Broadband’s data center and submarine cable businesses to establish SK Horizon, a company dedicated to artificial intelligence infrastructure. The carrier plans to attract about 3 trillion won in outside capital to expand investment in AI data centers, or AIDCs, and to build an AI infrastructure structure overseen by SK Telecom. The aim is to grow the data center operation — previously one division inside SK Broadband — into a standalone business and turn it into an “Asian AI infrastructure hub.”
In a regulatory filing on the 27th, SK Telecom said it will split its wholly owned subsidiary SK Broadband into a surviving company and a newly created entity, SK Horizon. Based on the book value of net assets, the split ratio is about 84% for SK Broadband and about 16% for SK Horizon. The company plans to complete the split in the first quarter of next year after obtaining government approvals and holding an extraordinary shareholders’ meeting. Through the spin-off, the data center business housed within SK Broadband will be reorganized into a standalone operation directly controlled by SK Telecom.
SK Horizon will take over eight data centers now in operation, including those in Seocho, Ilsan, Bundang, Gasan, Centum, Yangju and Pangyo, as well as AIDCs under construction in Ulsan and Guro. The combined capacity totals 318 megawatts. The new company will also handle the submarine cable projects needed for global AI operations. By placing data centers and the submarine cables that carry international data traffic under one roof, the company aims to sharpen expertise and speed up decision-making in AI infrastructure operations and investment. SK Broadband CEO Kim Sung-soo is expected to serve concurrently as CEO of SK Horizon.
SK Telecom has also secured a combined 3.08 trillion won ($2.1 billion) investment in the new entity from KKR and a consortium of IMM Investment and Stonebridge Capital. Once the investment is completed, SK Telecom will hold a 51% stake in SK Horizon to retain management control, with KKR and the IMM consortium holding 29% and 20%, respectively. The funds will go toward further AIDC expansion and related infrastructure. The move is seen as an effort to lower SK Telecom’s investment burden in the capital-intensive AIDC business by tapping outside capital, while accelerating expansion.
The reorganization also clarifies SK Telecom’s role in the AIDC business. SK Telecom will oversee overall business strategy and partnerships with global tech giants, while SK Horizon will handle the operation and expansion of existing data centers and the construction of submarine cables. SK Hyper, established in July, will take charge of developing new gigawatt-scale AIDCs. SK Hyper aims to secure 5 gigawatts of AIDC capacity by 2029 and 15 gigawatts by 2035 in phases. By dividing roles — SK Horizon for operating and expanding existing data centers, SK Hyper for developing ultra-large AIDCs — the group intends to speed up large-scale AI infrastructure investment.
Stripped of the data center and submarine cable businesses, the surviving SK Broadband will focus on fixed-line services such as high-speed internet, along with media and enterprise operations. SK Broadband said it plans to innovate existing products and services based on AI transformation, or AX, and to develop new business models to secure future growth drivers.