Thanks to double-digit growth in its AI business, Korea's leading mobile carrier KT Corp. recorded record quarterly operating profit of over 1 trillion won ($709 million) in the second quarter as it chose artificial intelligence as its next growth engine.
In a regulatory filing on Monday, the company announced that its integrated operating profit reached 1.01 trillion won from April to June, more than doubled from the same period last year, violating the 1 trillion won mark for the first time.
Revenues rose 13.5% to 7.43 trillion won, while net profit rose 78.6% to 733.3 billion won.
Profits were driven in part by 390 billion one-off profits from the sale of the company's real estate assets.
However, KT also attributes the active sales of business-to-business units, particularly AI services, to the starry outcome.
Revenues from AI and Information Technology Business increased 13.8% to 317.6 billion won per year, while its flagship wireless services added 1.6% to 1.7 trillion won. Broadband revenue also rose 2.1%.
KT hopes that Momentum will continue in the second half with the launch of new business-to-business products, including large-scale language models (LLMs) and advanced cloud computing services.
Also, some users of SK Telecom Co. are forecasting the growth of more powerful subscribers on mobile after switching carriers to KT following the April data breaches that affected all SK's 25 million customers.
Accelerated transition to AICT companies
The positive outcome of AI business is expected to accelerate KT's push to transform into a so-called AICT company.
AICT Services aims to use IT and AI technologies to enhance traditional communication services.
KT is the only company in Korea to establish an AI partnership with both Microsoft Corp. and Palantir Technologies Inc.
In February last year, it also signed a strategic partnership with Amazon Web Services (AWS) to enhance customized mobile and generator AI services for corporate customers.
We plan to deploy LLM in development with Microsoft Soon, and use encrypted cloud services using Confidential-Computing Technology, which processes encrypted data only after verifying a trusted execution environment.
“In the second half, we will release an encrypted cloud developed by Microsoft and announce the complete AI lineup, including the LLM model K-Chatgpt,” said Jang Min, KT's Chief Financial Officer. “This move will help KT solidify its position as a leading Korean AI company.”
Collaboration with major high-tech companies
KT's collaboration with Palantir in AI is also expected to gain even more traction.
In March it became the first Korean company to establish an exclusive strategic partnership with US high-tech companies.
KT has its own cloud and network infrastructure on Palantir's AI and big data platforms, helping transform AI, or AX, both public and private companies.
“We are currently the most trusted AX partner in the financial industry,” said a KT official.
Usage rates at data centers operated by KT Cloud, KT's Cloud Service provider, have already exceeded 90%, highlighting demand.
After not participating in the state-led sovereign AI initiative, KT will focus more on the private sector through collaborations with major high-tech companies, the company said.
Last week, the South Korean government chose five local technology companies, including LG, NAVER and SK Telecom, and led the country's flagship sovereign AI initiative to build a massive AI model that does not rely on US tech giants such as Openai, the operator of ChatGpt.
KT took part in the race but dropped out of the bid in the second round of evaluation.
I'll write on ji-hee choi at mymasaki@hankyung.com
Sookyung SEO edited this article.
