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Investment News

2017.07.17
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952
SK Telecom, SM form business marriage to mix ICT with hallyu power
According to Pulse by Maeil Business News Korea


South Korea’s major mobile operator SK Telecom Co. has joined hands with leading entertainment company SM Entertainment Co. to mix its advanced wireless technology and services with Korea’s winning brand of hallyu, or Korean Wave.




SK Telecom and SM Entertainment on Monday announced plans to work together in boosting content and ICT businesses by mutually investing in each of their related affiliates through a stock sale and purchase deal. SK Telecom will buy 25 billion won ($22.2 million) worth new shares in its sound system affiliate iRiver Co. and 65 billion won in SM Entertainment’s content production company SM Culture & Contents Co. (SM C&C). Entertainment will be investing 40 billion won in iRiver and 7.3 billion won in SM C&C.

The stock sale and purchase plan comes as SK Telecom and SM Entertainment have been putting out efforts to build overseas presence.

SK Telecom is hoping that the deal will help enhance its competitiveness in the content industry as SM Entertainment is Korea’s major entertainment company that is involved in various broadcasting content production and hallyu star management through its affiliate SM C&C that raised 95.4 billion won in revenue last year.

The partnership with SM Entertainment will aid SK Telecom’s overseas campaign through iRiver. It plans to make artificial intelligence (AI) speakers with voices of popular K-pop stars or earphones with celebrity logos.

SK Telecom’s iRiver plans to merge with SM Entertainment’s mobile contents producer SM Mobile Communications (SM MC) and fully acquire star merchandising firm SM Life Design Co. (SM LDC) and incorporate it into its own affiliate.

SK Telecom will develop services based on hallyu content such as hosting live fan meeting of SM label stars through its mobile TV platform oksusu.

SM Entertainment hopes to increase profit and broaden business portfolio by riding on SK mobile networks. It plans to acquire advertising unit of SK Telecom’s affiliate SK Planet Co. through SM C&C and create an advertising business model benchmarking Japan’s largest advertising agency Dentsu Inc. It plans to receive prior investment from advertisers from the initial content planning stage and re-invest in content. SM Entertainment aims to raise stable advertising profit while secure content manufacturing capability.



By Cho Hee-young

Copyrights Pulse by Maeil Business News Korea. All Rights Reserved.

Source: Pulse by Maeil Business News Korea (Jul. 17, 2017)


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