SK Telecom to spin off its non-telecoms companies

Korean ICT group SKT has decided it’s too diversified, so will be creating a new company to house stuff like SK Hynix and ADT Caps.

It’s calling the move a ‘horizontal spin-off’, whatever that means. The whole thought process still seems to be in a fairly early stage, as indicated by the rather vague diagram below. The long and short of it is that SKT has a bunch of businesses that aren’t directly concerned with connectivity, so they might do better having their own corporate identity.

Strangely omitted from the diagram is SKT’s main business as an MNO, which apparently accounts for almost half of the South Korean 5G market. That and the broadband bit will be the ‘surviving’ (something may have been lost in translation there) company, which is being tentatively labelled the AI & Digital Infra Company. The emphasis on AI seems designed to maintain its position as a 5G technology leader.

SK Hynix makes all types of memory chips as well as CMOS image sensors. It’s a public company with SKT owning 20% of its shares and is apparently the second biggest company on the Korean stock exchange by market cap. ADT is a domestic security company of which SKT owns 55%, with Macquarie having the rest. They will be grouped together with whatever else isn’t considered telecomsy enough into something provisionally called the ICT Investment Company.

The announcement features the usual blurb about increasing shareholder value, much like Dell’s recent decision to fully spin-off VMWare. Isn’t it funny how both mergers and spin-offs both increase shareholder value? In general the parent companies presumably want to free up some cash for investment or paying down debt or whatever, but feel compelled to dress it up as a more profound strategic move than it actually is.

Related Articles

The Sunday Brief: Q1 earnings preview—setting expectations

Tax Day greetings from the middle of Texas (the iconic Underwood’s Cafeteria sign is pictured – it’s definitely a Texas thing) and from Davidson/ Lake Norman.  Feels good to be on the road again.  This week, we will divide our time between first quarter earnings preview for Verizon and AT&T (both scheduled to report this […]

The post The Sunday Brief: Q1 earnings preview—setting expectations appeared first on RCR Wireless News.

Two challenges that come with expanded broadband services

The coronavirus pandemic has led to an intensified focus on broadband availability, as people around the world turned to online services to stay connected, work and learn. Terry Young, who is director of service provider and 5G product marketing for A10 Networks, sees the intense focus on expanding broadband networks as one of the few […]

The post Two challenges that come with expanded broadband services appeared first on RCR Wireless News.

‘There’s a lot of smoke and mirrors’: Betacom promises the real deal in managed private networks

To hear Brian Watkins tell it, the telecom industry’s offerings of managed private wireless networks are, once you dig into the details, not all they’re cracked up to be. Maybe they aren’t designed in-house, or the building of the network is contracted out, or the offering is stitched together on the fly and then management […]

The post ‘There’s a lot of smoke and mirrors’: Betacom promises the real deal in managed private networks appeared first on RCR Wireless News.

‘I want to be crystal clear’: EXFO founder and chairman spars with Viavi over potential acquisition

“I will not consider any alternative change of control transaction of EXFO,” says company founder & chairman EXFO Founder and Chairman Germain Lamonde has extended an acquisition offer for outstanding shares that will take EXFO private, and when Viavi Solutions used that offer as an opportunity to press its repeated bid to acquire EXFO, Lamonde […]

The post ‘I want to be crystal clear’: EXFO founder and chairman spars with Viavi over potential acquisition appeared first on RCR Wireless News.