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SK Telecom Co., Ltd.
8/9/2024
Good morning and good evening. Thank you all for joining this conference call for the earnings results of SK Telecom. This conference will start with a presentation followed by a Q&A session. If you have a question, please press start one on your phone during the Q&A. Now we will begin the presentation on SK Telecom's second quarter earnings results of the fiscal year 2024.
Good afternoon. I am Heejun Jung, IRO of SK Telecom. Thank you for joining SK Telecom's earnings conference call.
Today, we will first deliver a presentation on major events, 2024 Q2 earnings highlights, and business performances, which will be followed by a Q&A session.
The call is attended by our executives from relevant business divisions, including Yangseop Kim, CFO of SK Telecom,
And we're providing consecutive interpretation for the call.
As you may know, I would like to remind you that all forward-looking statements are subject to change depending on various factors such as market and macro situation. Let me now present our CFO. Hello, I'm Kim Yang-seo, CFO of SK Telecom.
Good afternoon. This is Yang-Seok Kim, CFO of SK Telecom. We are already in the second half of 2024, which marks the 40th anniversary of SK Telecom. Under the vision of becoming a global AI company, we have been mobilizing enterprise resources to implement the AI pyramid strategy. We have been especially focusing on expanding partnerships and investments with leading global AI companies to strengthen our global AI capabilities.
Since last year, the amount invested in the AI field In June, we invested $10 million in Perplexity, which is famous for its next-generation AI search engine. In July, we decided to invest $200 million in SGH, the leading company of AI data center solutions.
Since last year, SK Telecom has invested more than $300 million in AI, including a $10 million investment in June in Perplexity, a leader in next-generation AI search engine, and a $200 million investment in July in SGH, or Smart Global Holdings, a global leading provider of AI data center solutions.
This year's investment and alliance are based on SK Telecom's AI pyramid framework We have been carrying out these investments and alliances in a strategic and organized manner according to the AI pyramid strategy.
In order to expand the AI business, we will continue to pursue investments and partnerships actively to strengthen AI competitiveness and leverage global demands for AI services together with members of the Global Telco AI Alliance or GTAA.
Let me now report on the consolidated financial results for the second quarter of 2024. The sales increased by 2.7% compared to the previous year due to stable growth of major companies including telecommunications companies. The sales increased by 4,422.4 billion won compared to the previous year due to 2.7% compared to the previous year due to stable growth of major companies including telecommunications companies. The sales increased by 4,422.4 billion won compared to the previous year due to stable growth of major companies including telecommunications companies. The sales increased by 4,422.4 billion won compared to the previous year due to stable growth of major companies including telecommunications companies. The sales increased by 4,422.4 billion won compared to the previous year due to stable growth of major companies including telecommunications companies. The sales increased by 4,422.4 billion won compared to the previous year due to stable growth of major companies including telecommunications companies. The sales increased by 4,422.4 billion won compared to the previous year due to stable growth of major companies including telecommunications companies. The sales increased by 4,4 Consolidated revenue reported 4,422.4 billion won, up 2.7% year-over-year, driven by the stable growth of M&O business and major subsidiaries. Operating income posted 537.5 billion won,
up 16% year-over-year, thanks to the stabilization of costs such as marketing and depreciation costs, as well as recognition of one-off profit. The Operation Improvement Initiative has contributed to improved business fundamentals, and the AI Pyramid Strategy has produced tangible results in the respective domains. Net income posted 350.2 billion won.
Byelto standard sales increased by 2.3% compared to the previous year. On a non-consolidated basis, revenue posted 3,191.5 billion won, up 2.3% year-over-year. Operating income and net income reported 450.4 billion won and 280.3 billion won respectively. Let me now turn to business highlights for 2024 second quarter and strategic directions in accordance with the AI pyramid strategy. First, in the AI infrastructure domain, data center revenue grew 20.5% year-on-year
thanks to AI-driven demand growth for data center and higher utilization rates of the data centers. As was reported earlier, with our investment in SGH, we have secured differentiated capabilities in the AI data center market, which is expected to boost our AI data center business and improve operational efficiency.
SGH has built a large AI cluster of 16,000 GPUs in the meta of 2023, SGH is a leader in data center solutions.
They developed ultra-large AI clusters with 16,000 GPUs for meta in 2023 and were selected in 2024 as an AI cluster operator of the voltage park with 24,000 GPUs. We plan to combine SGH's capabilities to build and operate AI clusters with SK Telecom solutions such as data center management system and liquid immersion cooling to target the global AI data center market aggressively.
We will also actively leverage SGH's capabilities for edge AI, which belongs to the AI infrastructure domain.
SGH owns Edge Solutions Specialized for Industrial Applications. The two companies will cooperate to develop telecom Edge AI solutions by combining AI with telecom infrastructure.
The second Global Telco AI Roundtable was held at the TNPROM, a global communication technology union in Copenhagen last June. Partnership activities are also taking place actively regarding LLM.
At an event organized by the TM Forum, a global alliance of telco and tech companies held in Copenhagen in June, the second Global Telco Alliance Roundtable was held, where the five founding members of the GTAA signed an agreement to establish a joint venture for telco LLM, thereby establishing a forward base for AI ecosystem expansion. With the establishment of the joint venture, SK Telecom aims to be a game changer that leads the global AI market with domestic and foreign AI players.
다음으로 AIX 영역에 대해 말씀드리겠습니다. Next is the AIX domain. 먼저 모바일 사업에서 당사의 5G 가입자 수는 2024년 6월 말 기준 1,623만 명을 기록하였고, 5G 5G 고객 비중은 70%를 넘어섰습니다. SK 브로드밴드의 경우 2024년 6월 말 기준 960만 유료 방송 가입자와 705만 초고속 인터넷 가입자를 확보했습니다. 또한 AI 기술을 통해 OPEX, CAPEX 비용도 효율화하며 유무선 사업의 체질을 지속 혁신해 가겠습니다. The MNO business recorded 16.23 million 5G subscribers as of the end of June 2024, accounting for more than 70% of the total subscriber base.
SK Broadband's pay TV subscribers and broadband subscribers reached 9.6 million and 7.05 million respectively as of the end of June. While the fixed and mobile market is maturing, our activities to sell high ARPU price plans and attract high tier of subscribers continue to improve profitability. We're also committed to innovating business fundamentals of the fixed and mobile business through OPEX and CAPEX efficiency improvement using AI.
The enterprise business continues to grow by about 10% compared to the previous year. In addition to stable performance improvement, the IoT business recorded an increase in sales by 29% compared to the previous year, and the cloud business also showed 28% growth compared to the previous year, except for the one-time effect. In particular, the AI cloud business was the first to succeed in this quarter, checking market demand,
The enterprise business has maintained the growth trend of approximately 10% year-over-year. Along with stable leased line revenue, the IoT business posted a revenue growth of 29% year-on-year. The cloud business also saw their revenue grow 28% YOY, excluding one of sectors. It is worth noting that we successfully won the first order for AI cloud business in the second quarter, thereby confirming market demand. We will pursue business scale-up going forward.
Next, AI services. As of the end of June, the total number of participants exceeded 4.5 million. In the second half of the year, we are preparing to move forward as a personal AI assistant by improving convenience and accuracy by introducing the production-type AI search function of Perplexity, which I mentioned earlier, along with UX revision at the center of users.
ADOT started to offer the call recording and summary service and real-time call interpretation service for Android handsets in the second quarter. As of the end of June, the cumulative downloads exceeded 4.55 million. In the second half of the year, we will upgrade UX to make it more user-friendly and introduce a generative AI search feature of perplexity. We're working on improving convenience and accuracy of ADOT to make it a super personal AI assistant.
T-UZU recorded more than 2.7 million real users per month by the end of the second quarter of 2024. Following the YouTube Premium Package, which has been gaining popularity in the market, T-UZU will release the UZU Pass Netflix at the end of June to get a hot response. In order to expand the OTT revenue in the future, the company plans to expand the OTT revenue in the future in order to expand the OTT revenue through T-UZU, including WAVE.
T-Universe achieved MAU of more than 2.7 million as of the end of the second quarter 2024. Following the YouTube Premium package that has enjoyed popularity, we launched the Universe Pass Netflix in late June, which is also receiving a positive response in the market. We will continue to expand partnerships with streaming platforms to spread a new culture where people subscribe to T-Universe to use streaming services, including WAVE.
Finally, let me turn to shareholder returns. And through growth investment, financial structure improvement, and optimal balance between shareholders and shareholders,
The DPS for the second quarter was determined at 831, the same as Q1 2023. The company will strive to reinforce strong earnings from the fixed and mobile business and improve profitability and efficiency while producing tangible results from the AI company initiatives. Furthermore, we will do our best to achieve optimal balance among investments for growth, financial structure improvement, and shareholder returns, thereby maximizing corporate value and shareholder value.
We ask for your continued support and encouragement. Thank you. We will now begin the Q&A session.
질문을 하실 분은 전화기 버튼의 별표와 1번을 누르시기 바랍니다. 질문을 취소하시려면 별표와 2번을 누르시면 됩니다. Now Q&A session will begin. Please press Start 1, that is, Start N1, if you have any questions. Questions will be taken according to the order you have pressed to Start N1. For cancellation, please press Start 2, that is, Start N2, on your phone. The first question will be presented by Jaemin Nan from NH Investment and Securities. Please go ahead with your question.
There are some questions about the performance of the second quarter. First of all, I would appreciate it if you could tell us the main factors that showed good performance in the second quarter. In addition, I think there was a one-off recognition related to the patent. I would appreciate it if you could explain this as well. And I would also like to talk about the prospect of how profitability will continue in the second quarter. The second question is about the competition situation in the second quarter. It's similar to the previous question. However, there is a competition situation in the second quarter and the release of iPhones in the second half. I would appreciate it if you could tell us what the competition situation will be in the second half.
I'm from NH Investment and Securities. Thank you for taking my questions. First of all, I'd like to congratulate you on very good results despite challenging market environments. I'd like to ask you a couple of questions regarding your second quarter results. First of all, can you elaborate more on the factors behind your good results for the second quarter, in particular, related to the one-off profit you recognize related to your patent pool? and also your outlook on the bottom line trend in the second half of the year. My second question has to do with the competitive landscape in the second quarter, which is also related to my previous question. And going down the road in the second half, we're expecting a new iPhone release, and so can you comment on your projections on the overall handset-related competition landscape? Thank you.
I am CFO Kim Young-seop of SK Telecom. Thank you for your questions. I would like to first take your first question on the second quarter results. Yes. We believe that there were several reasons behind the good results for the second quarter. First of all, because the 5G subscriber base and the pay TV market continue to grow,
and also because AI and new growth businesses including AI data center are producing good results.
Secondly, we have been striving to improve the overall business fundamentals across the company
and have been promoting efficiency in terms of our profit structure, balance sheet, and cash flow. And I believe these efforts have led to better results for the second quarter as well.
Thirdly, I think that the temporary increase in profit due to the recognition of the patent interest that you mentioned earlier has also been a factor in improving the market expectations.
And thirdly, as you mentioned, we recognize patent-related profit all at once, and this one-off gain also added to better earnings for the quarter.
To elaborate more on this one-off gain from our patent pool,
Based on our diverse R&D results, we have been utilizing monetization from the IP pools based on our patents.
Based on our diverse R&D results, we have been utilizing monetization from the IP pools based on our patents. Based on our diverse R&D results, we have been utilizing monetization from the IP pools based on our patents. Based on our diverse R&D results, we have been utilizing monetization from the IP pools based on our patents.
So basically the structure is that we receive royalty fees on our patent pools, and the agency that is in charge of this business will allocate such income in proportion to our stake, and then we will recognize some expenses, including the fees that we pay to the agency as well as fees related to joint R&D.
And if I were to compare the previous quarter or the second quarter's performance with the previous quarter, as you know, in the second quarter last year, Furthermore, we benefited from YOY and QOQ base effects. To be more specific, in the second quarter of last year, we saw a temporary decline in M&O revenue
due to stronger competition in the MB&O market. And on a Q&Q basis, in the previous quarter, we recognized incentives for employees and executives.
In the process of reaching a global AI company, investment resources will be required at a certain level in the future, but these investment achievements will gradually be ignored, and as we grow evenly in all areas of the AI pyramid, As SK Telecom continues to evolve as a global AI company, a certain level of investments and resources will be required going forward.
But we will do our best to ensure that these investments produce tangible results and there will be growth in all domains of the AI pyramids while continuing to improve the bottom line through efforts to improve the overall business fundamentals and AI transformation.
Now on your second question on the competitive landscape, a marketing strategy team will respond.
I am Park Hyung-yoon from the Marketing Strategy Team.
Due to regulatory changes and increasing public interest regarding handset subsidy and marketing expenses, including discussions on the abolition of the enforcement decree of the Mobile Device Distribution Improvement Act, and introduction of mobile number transfer support, we saw a slight increase in the number transfers on a year-over-year basis.
But while number transfers increased for all three telcos, it has had little impact on the market size or profitability. And we believe that it will take some time before we can determine whether such a trend is temporarily driven by changes in subsidy rules.
As the 5G market continues to mature, we believe that the telcos are no longer competing on subsidy, but rather competing on price plans and differentiated benefits and services. So we will continue to focus on strengthening our own competitive edge based on differentiated services, regardless of regulatory changes.
We will utilize our AI capabilities for sophisticated target marketing and strengthen online distribution channel competitiveness and utilize AI customer centers for more effective marketing and cost efficiency.
The next question will be presented by Aram Kim from Shinhan Securities. Please go ahead with your question.
Hello, I'm Kim Ara. Thank you for the opportunity to ask a question. I'm curious about how you will use the resources you have secured in the 3rd and 4th quarter, not only in this quarter, but also in the next quarter to improve profitability. I would appreciate it if you could tell us the priority ranking of the fund management, stock exchange, and AI investment that is being carried out in the SK Group recently. I'm from Shinhan Investment and Securities. Thank you for taking my questions.
We can expect good results for the third quarter and the fourth quarter as well, thanks to your continued efforts to improve the bottom line. So when you have these additional resources available from these improved earnings, I'd like to understand how you're going to utilize them, especially when it comes to striking a balance between reducing the liabilities, which is an initiative that has been led by the SK Group as a whole, and shareholder returns and investments for your AI business. And secondly, there has been many reports in the media about your data center business as well as your new AI initiatives. So can you comment on which AI businesses you believe are going to be most profitable? And can you also elaborate on your edge AI plans?
Thank you for the question.
Thank you for your questions. I'm CFO. Let me comment on your question regarding our resource allocation plan. On a consolidated basis, our EBITDA is approximately 5 to 5.5 trillion won, and when we spend about 3 trillion won for capex and 1 to 1.5 trillion won for recurring expenses, including payments for frequencies and interests, then we're left with about 1 trillion won of free cash flow.
The company is looking at the overall profit structure, asset structure, and cash flow from a zero-based point of view, making additional cash, and taking a close look at the part that can make the cost and assets more efficient. In my opinion, if we look at the next three to five years, it would be difficult to tell you the exact number right now, but it's a pretty meaningful
This year, we are carefully examining our earnings and debt structure and cash flow to figure out where we can generate additional cash flow. And based on our initial analysis, in the next three to five years, although I cannot suggest any concrete numbers at this point in time, the company is expected to generate additional resources.
There are three main ways to use the money created by the company. We need to consider investment for future growth. When the profit is significantly improved, I think we need to consider increasing the share price. Lastly, I think it is very important to manage the stock structure more firmly.
As you may know, the company may utilize these access cash flow in three major ways. We first need to consider investments for future growth and also need to consider to increase shareholder returns when we see significant improvements in our earnings. And at the same time, it is crucial to boost financial stability as well.
First of all, when it comes to investment, our company is focused on the AI pyramid strategy framework We will focus on areas where we can make money in the future. For the past two years, we have invested in Entropiq, Lambda, Perplexity, and SGH. These are areas such as LNM, AIDC, and PA that can be monetized with AI. This year's AI-related capital investment is expected to be about 300 billion, including SGH 200 million.
First, to give you more elaboration on our investment plans, our investments will continue to be strictly guided by our AI pyramid strategy and will be made in areas that can generate profit in the future. For the past two years, we have invested in Anthropic, Lambda, and SGH for businesses such as LLM, AI Data Center, and PAA, and these are the areas where we can monetize based on AI. And this year, our AI-related equity investments are going to be around $300 billion, including a $200 million investment in SGH.
AI investments are going to be around $300 billion, including a $200 million investment in SGH.
Doing AI business requires an astronomical amount of investment, and AI is advancing so rapidly. And we've decided to choose the path of partnering with leading AI companies in Korea and abroad, and we have been making small-scale investments to secure capabilities that we need.
Some people ask why we are investing in SK Telecom instead of SK Square. We want to emphasize that our company is focusing on AI pyramid strategy to dramatically increase the competitiveness of Telco and to create new profits and improve performance.
We often receive questions on why SK Telecom and not SK Square is making these investments after the spin-off, but I'd like to reiterate that we're executing these investments under the AEI pyramid strategy with the clear goals of dramatically strengthening our core competitiveness as a telco, creating new sources of profit, and improving earnings.
First of all, when it comes to stock exchange, our stock exchange is not only about the size Next, in terms of shareholder returns, we believe that our shareholder returns are in line with global standards in terms of size and methods.
Our dividend payout ratio is higher than 78%, and our dividend yield is a 7% level, and we also carried out large-scale share buybacks and cancellations in 2021 and 2023.
However, I don't think these efforts and the size of the stock exchange rate at the highest level are fully reflected in the value of the company. To be honest, I have a lot of concerns about this part.
However, it is also true that these efforts and a high level of shareholder returns have not been properly reflected in our corporate valuation in the stock market. And honestly, this is something that concerns me as a CFO.
Basically, from the point of view of TSR, I think it is right to return returns to shareholders at least more than the cost of equity through the growth and performance improvement of the company, as well as the exchange rate. While maintaining the balance stably, So in principle, in terms of total shareholder return, I believe we need to return to shareholders more than the cost of equity through business growth and higher earnings.
We will continue to maintain a stable dividend level, conduct share buybacks and cancellations when the timing is appropriate, and in the medium to long term, we will consider increasing shareholder returns in proportion to significant earnings improvements.
Lastly, I would like to say that the financial structure of SK Telecom is quite excellent. The domestic credit rating has been high for a long time,
Finally, to comment on borrowings, we are confident that SK Telecom's balance sheet is very strong, as is demonstrated by the very high credit ratings that we've been maintaining in Korea and abroad for a long time.
Nevertheless, to expand room for future investments and shareholder returns in the long run, it is also necessary to reduce borrowings to a more comfortable level.
Rather than mentioning any artificial target as to how much to reduce by when, what I can say now is that some portion of additional cash flow generated from improved business performance will be used to improve the financial structure in a flexible manner.
To sum up, our company is committed to creating additional resources in a meaningful way through our company's efforts to improve the quality of our business.
So to sum up, we will improve our business fundamentals in all areas of business to generate meaningful additional resources, which will be used for investments for growth, shareholder returns, and balance sheet improvement in a balanced manner. Thank you.
Regarding your question on edge AI, the infrastructure engineering office will take that question. AI computing power.
AI computing power. I'm Ryu Jeong-won from the Infrastructure Engineering Office. As you may know very well, AI services demand AI computing power for large-scale AI learning and inference, and AI computing has been provided by centralized AI data centers.
Recently, we also see a growing demand for distributed AI computing, such as on-device AI. But on-demand AI has limitations in terms of battery life and performance,
And here, Edge AI has emerged as an alternative solution, and we believe that Edge AI can offer new opportunities for telcos. Edge AI has emerged as an alternative solution, and we believe that Edge AI can offer new opportunities for telcos.
Edge AI has emerged as an alternative solution, and we believe that Edge AI can offer new opportunities for telcos. Edge AI has emerged as an alternative solution, and we believe that Edge AI can offer new opportunities for telcos. Edge AI has emerged as an alternative solution, and we believe that Edge AI can offer new opportunities for telcos. Edge AI has emerged as an alternative solution, and we believe that Edge AI can offer new opportunities for telcos. Edge AI has emerged as an alternative solution, and we believe that Edge AI can offer new opportunities for telcos. Edge AI has emerged as an alternative solution, and we believe that Edge AI can offer new opportunities for telcos. Edge AI has emerged as an alternative solution, and we believe that Edge AI can offer new opportunities for telcos. Edge AI has emerged as an alternative solution, and we believe that Edge
To give you more details, Edge AI is about delivering AI computing and communication services using telcos assets and equipment. AI learning requires large data centers, AI data centers, but AI inference can be handled by Edge AI.
Edge AI is superior to AI data centers in terms of response time and information security while providing stronger AI computing compared to on-demand, on-device AI.
and it is an area where telcos can excel.
Our company is cooperating with global big tech and telco entrepreneurs to set up an AI server in some telecommunications countries, and we are currently introducing a solution that can provide efficient AI computing. We are also continuing our technology standardization activities, and in the future, we will continue to provide AI and telecommunications services
For that, we are working with global big tech companies and telcos to develop ways to provide efficient AI computing by placing AI service in some telco-based stations. We will continue with technology standardization-related activities and develop into an AI RAN in the future where one equipment can provide both AI and telecom services.
If H-AI infrastructure is successfully established, we expect it to be a chance to re-evaluate the value of the communication infrastructure itself. If H-AI infrastructure is well established,
then we can increase AI revenue and expand AI business in a cost-efficient manner utilizing our existing telecom assets and equipment. And this will result in top-line growth as well as creating an opportunity for our telco infrastructure to be revalued. Thank you.
Next question is from Junseop Kim from KB Securities. The next question will be presented by Junseop Kim from KB Securities. Please go ahead with your question.
Thank you for the question. I'm Junseop Kim from KB Securities. I would like to ask two questions related to AI. The first is about the perspective and perspective of the AI business. Recently, SK Telecom is showing active activities related to the AI business. I am Kim Jun Seo from KB Securities. Thank you for taking my questions. I'd like to ask two questions related to your AI business.
First of all, when are you expecting more materialization of results coming from your AI businesses? Recently, SK Telecom has been exhibiting a good growth in terms of AI business, and I'd like to understand when these initiatives will actually translate into more visible earnings. Secondly, this is related to the first question, what is your expectation for your investment, $10 million investment in perplexity, and what has been going on regarding this? Thank you. Thank you for your questions. I will first take your first question on the timeline regarding AI businesses.
It's been three years since the company started promoting AI, and the way to make money with AI is gradually becoming visible. SK Telecom has been working with AI DC, AI B2B,
It's been three years since SK Telecom pursued AI in earnest, and we see now visible ways to monetize AI. SK Telecom aims to generate profit in three main areas of AI data center, AI B2B, and AI B2C business.
AI data center is the first area that we can pursue right away.
Typically, traditional data centers start to generate revenue three years after construction, but AI data centers can post sales right away. We will move away from a conventional co-location type data centers, but offer GPU as a service, add energy solutions, and pursue global expansion.
AI B2B is changing from cloud to AI. In this market, In addition to cooperation with Big Tech such as Entropiq Open AI, the importance of A.X, which was developed by the company in terms of security and cost, is also rising. The company plans to enter the global market by satisfying the needs of customers and employees through mutual cooperation in the group business to promote the enterprise business.
In the AI B2B market, there's been a shift from cloud to AI, and this is where we're cooperating with tech companies such as Anthropic and OpenAI. And our in-house developed A.X is becoming important in this market as well in terms of security and cost. So for enterprise business, we will cooperate with SK Group companies to meet AI needs of customers and affiliates and pursue global expansion as well.
In the short term, In the short term, our revenue target for this year is more than 60 billion won by providing generative AI, AICC, and AI data as solutions to the public, financial, and the manufacturing sectors. AI B2C is the first part that we entered through ADAS in Korea. We are working on a service reform to strengthen the personal secretary function, and we are reviewing various factors for monetization. In particular, monetization through subscription has become a general model for global AI services, and I think it will be an area where the company can do well.
Finally, on the AI B2C business, we were actually the first company to enter this market with ADOT, and we are working on service upgrade to strengthen personal assistant features and considering various ways to generate profit using ADOT this year. Monetization through subscription is becoming a common business model for global AI services, and SK Telecom can be competitive in operating this type of subscription business model.
We also aim to conduct global market tests this year for global PAA.
We're planning to add multi-LLM model including A.X, Anthropic, and OpenAI. We're considering diverse services such as AI search in cooperation with perplexity and productivity services. Thank you.
Now, regarding your second question, the head of AI growth strategy will address this question.
I'm Lee Jae-shin, and I'm in charge of the AI growth strategy. Last June, the company invested $10 million in Pupflex T, which provides AI search engines. Pupflex T is an AI search professional company that reduces hallucinations by optimizing search engines or creating search increases and releases AI search services that increase search accuracy. I'm Lee Jae-shin, head of AI Growth Strategy.
To respond to your second question, in June, SK Telecom made an equity investment of $10 million in Perplexity, an AI search engine company. Perplexity specialized in generative AI search, and they launched an AI search service with higher accuracy and reduced hallucinations. through search engine optimization and retrieval augmented generation, and their corporate value has exceeded $3 billion in just two years after startup.
Based on Perplexity's AI search technology, the company has decided to develop a user-friendly AI agent and cooperate with each other to expand AI technology, including in-house software.
Based on generative AI search technology of Perplexity, we will develop user-friendly AI agents, and the two companies have agreed to cooperate on AI technology expansion, including inference software.
In particular, Korean Enhanced AI Search, which was agreed to be jointly developed by Perplexity and its partner, combines the technology of both companies 최적의 AI 검색을 고객에게 제공할 수 있을 것으로 기대합니다.
In particular, the two companies have agreed to develop Korean enhanced AI search, which will be optimized for Korean internet search environment and search culture. SK Telecom and Perplexity will combine their technological capabilities to offer the most optimized AI search experience for our customers.
Perplexity는 ChechPT, Entropic Cloud, and Multi-LLM Agents will be installed on ADAT, which was reformed at the end of August. Publicity Pro will be provided free of charge for a year for the only domestic communication company in September.
Perplexity will be added to the upgraded ADOT as part of multi-LLM agent together with ChatGPT, Anthropic, and Quad in late August. And also, SK Telecom will be the only telco in Korea to offer the pro model of Perplexity, which will be available exclusively for our customers free of charge for one year from September.
Also, Perplexity will be added to the In addition, Perplexity Engine will be added to the global personal AI assistant project that we're currently working on as a default AI search engine
which will offer convenient AI search experiences that reduce hallucination and increase accuracy.
This concludes the earnings conference call for 2024 second quarter. If you need further explanations or have additional questions, please contact IR at any time. Thank you.