SK Telecom - Q1 2023
May 10, 2023
Transcript
Operator (participant)
Good morning and good evening. First of all, thank you all for joining this conference call. Now we will begin the conference of the fiscal year 2023 first quarter earnings results by SK Telecom. This conference will start with a presentation, followed by a divisional Q&A session. If you have a question, please press star one, that is star and one on your phone during the Q&A. Now we shall commence the presentation on the fiscal year 2023 first quarter earnings results by SK Telecom.
Speaker 9
Good afternoon. I am Hee Jun Chung, investor relations officer at SK Telecom. Thank you for joining SK Telecom's earnings conference call. We are providing consecutive interpretation for the call, which will consist of a presentation on the first quarter 2023 earnings highlights, future business plans and strategic directions, as well as the Q&A session.
The call is attended by our executives from relevant business divisions, including Jin-won Kim, CFO and Head of Corporate Planning of SK Telecom. Before we begin, I would like to remind you that all forward-looking statements are subject to change depending on market situations. Let me now present our CFO.
Good afternoon. This is Jin-won Kim, CFO of SK Telecom. SK Telecom participated in MWC 2023, held in Barcelona, Spain in late February, and presented its concrete plans for the AI company vision and recent achievements. It was an opportunity to introduce AI startups that we're closely cooperating with and engage in active discussion with overseas telcos and big tech companies to build a global cooperative framework. SK Telecom will strive to lead AI transformation to ensure that all generations, businesses and industries can enjoy the benefits of AI to the fullest.
Now let me report on the consolidated financial results of the first quarter 2023. Consolidated revenue reported KRW 4,372.2 billion, up 2.2% year-over-year, thanks to the growth of both the fixed and mobile business and the new businesses. It reported a decline of 0.5% quarter-over-quarter due to the drop in handset sales of the subsidiary company. The operating income posted KRW 494.8 billion, up 14.4% year-over-year and 94.4% quarter-over-quarter, mainly due to the base effect of one-off labor costs recognized in Q1 of the previous year and seasonal expenses recognized in the previous quarter.
Net income grew 37.3% year-over-year and 35.2% Q-on-Q to come in at KRW 302.5 billion on the back of increase in dividend income from the invested companies. On a non-consolidated basis, revenue grew 1.3% year-over-year and 0.7% Q-on-Q to KRW 3,117.3 billion. Operating income and Net income reported KRW 415.7 billion and KRW 422.2 billion respectively. Let me now turn to the first quarter business highlights and strategic directions of the company that is pursuing transformation and leap forward into an AI company. Be done A. service SK Telecom is providing differentiated AI services based on its own hyperscale language technology accumulated over the years.
In addition to the A. service, we are actively applying our AI technology to the five business groups wherever appropriate to identify and implement concrete ways to maximize growth and profitability of each business. As you're aware, AI is advancing rapidly, and the scope of AI-powered services is getting wider. Against this backdrop, SK Telecom will continue to scale up its AI capabilities and services through partnerships with diverse Korean and foreign AI companies in areas where such partnerships are necessary, including the use of ChatGPT, while further advancing its own AI technology. As part of the strategy, SK Telecom signed a strategic partnership with Scatter Lab in April with an equity investment of KRW 15 billion. Known for its Iruda chatbot that can hold empathetic conversations, Scatter Lab is an AI startup that uses deep learning to develop a relationship-oriented AI agent that can have human-like conversations with users.
The partnership with Scatter Lab aims to jointly develop an AI agent service capable of holding empathetic conversations for the ADOT service, which is optimized for personalization through long-term memory and multimodal technology. The joint development will support the evolution of ADOT to be more human-like than humans. The two companies have also agreed to pursue close cooperation to develop a hyperscale language model that is equipped with emotion and knowledge domains. SK Telecom is stepping up efforts on all fronts to transform itself into an AI company by strengthening cooperation with leading AI companies in Korea and actively pursuing partnerships with global top-tier AI companies. With global presence secured through its launch in 49 countries last year, ifland has attracted more than 10% of MAU from overseas in the first quarter.
It is expanding the scope of global cooperation through MOUs signed with several global companies, including Deutsche Telekom, T-Mobile, and Axiata. Ifland is evolving into metaverse type social media platform centered on 3D virtual spaces by launching Ifhome in May, a personalized 3D space. It also plans to strengthen its economic system in order to secure a new monetization structure by introducing a content marketplace based on in-app transactions in the second half of this year. T Universe has solidified its position as a leading subscription product in Korea with the average MAU of more than 1.8 million in Q1. Following the introduction of an annual subscription service last year, T Universe continues to launch new service features to enhance customer experience and convenience, including a topping function where users can add extra services to their subscription and a gifting function.
It is also reinforcing competitiveness in product differentiation by leveraging partnerships with big players, which resulted in the recent launch of YouTube Premium in addition to Amazon Free Shipping.
Jin-won Kim (CFO and Head of Corporate Planning)
SK Telecom은 2025년 국내 최초 상용화를 목표로 준비 중인 UAM 사업에서 기체, 통신망, 서비스 영역을 총 포괄하는 Total Service Provider로서 글로벌 1위 기체 제조사인 Joby Aviation, Aviation과의 국내 독점 협력, MaaS platform, 5G 항공 통신망 등 차별적인 역량을 보유하고 있으며, 실증 사업 성공을 통한 라이선스 조기 확보 등 주도권 선점을 위해 최선을 다하고 있습니다.
Speaker 9
In the UAM business that aims to launch Korea's first commercial UAM service in 2025, SK Telecom aims to be a total service provider that covers aircraft, telecommunications, and services. We have secured differentiated capabilities based on MaaS platform, 5G aerial network, and an exclusive partnership with Joby Aviation, global number 1 UAM aircraft manufacturer. We're doing our best to gain leadership in the industry by securing a license early through successful demonstration projects.
Jin-won Kim (CFO and Head of Corporate Planning)
뿐만 아니라 당사는 UAM 상용화 초기에 사회적 수용성 확보에 필수적인 대중의 관심, 흥미, 친숙도 제고를 위해 UAM 체험 VR 등 Interaction Item을 개발하여 MWC, Seoul Mobility Show, World IT Show 등 다양한 전시 행사에서 지속 선보이고 있습니다.
Speaker 9
In addition, we continue to showcase interactive items such as immersive VR content experience UAM at various exhibitions and events, including MWC, Seoul Mobility Show, and World IT Show to boost public interest and familiarity, which is essential to secure social acceptance in the early stages of UAM commercialization.
Jin-won Kim (CFO and Head of Corporate Planning)
엔터프라이즈 사업은 데이터센터와 클라우드를 중심으로 꾸준한 매출 성장세를 나타내고 있습니다. 특히 데이터센터 사업은 가산, 식사 데이터센터의 안정적 가동률 상승에 힘입어 매출이 지속적으로 증가하는 모습입니다.
Speaker 9
The enterprise business is enjoying continued revenue growth centered on data centers and cloud business. In particular, stable increase in the utilization rate of Gasan and Siksa data centers is supporting steady revenue growth.
Jin-won Kim (CFO and Head of Corporate Planning)
또한 일 분기에는 지난해 사업을 시작한 AICC 분야에서 국내 최대 규모의 수주를 달성하였습니다. 이를 레퍼런스로 삼아 최근 각광받고 있는 콜센터 사업의 AI 전환을 본격적으로 확대해 나갈 계획입니다. 이외에도 다양한 AI 기술 및 솔루션을 활용하여 고객의 AI 전환을 지원하고 신규 고객 확보를 통한 추가 성장 기회도 지속 모색하고자 합니다.
Speaker 9
In the first quarter, we have secured the largest order in AICC business, which started last year. Using this as a reference, we plan to expand AI transformation of the call center industry, which has been in spotlight recently. In addition, we intend to utilize various AI technologies and solutions to support customers AI transformation and continue to explore further growth opportunities through new customer acquisition.
Jin-won Kim (CFO and Head of Corporate Planning)
다음으로 당사 사업의 근간이 되는 유무선 통신 사업에 대해 말씀드리자면, 일 분기 말 기준 당사 5G 가입자 수는 천사백십오만 명을 기록하며, 5G 고객 비중이 육십 프로를 상회하였습니다. 당사는 지속적인 AI 기반의 디지털 Transformation을 통해 양질의 가입자를 확보하여 지속적인 실적 개선을 도모해 나갈 계획입니다.
Speaker 9
Let me now report on the performance of the fixed and mobile business, which is the basis of our company. As of the end of Q1, the number of 5G subscribers reached 14.15 million, accounting for more than 60% of the total subscribers. We plan to attract high quality subscribers through continuous digital transformation based on AI to sustain earnings improvement.
Jin-won Kim (CFO and Head of Corporate Planning)
유료방송 가입자 수는 일 분기 말 기준 구백사십만 명, 초고속 인터넷 가입자 수는 육백칠십육만 명을 기록하였습니다. 당사는 유선 시장에서 IPTV 및 초고속 인터넷 순증 MS 일위를 달성하며 가입자 성장을 지속하였고, 공고한 가입자 기반 위에 기가 인터넷 비중 확대 등 고가치 가입자 확보 노력을 중심으로 한 성장을 이어나갈 계획입니다.
Speaker 9
As of the end of Q1, the PayTV subscribers and broadband subscribers reached 9.4 million and 6.76 million respectively. We continue to grow the subscriber base by achieving number one net adds market share for IPTV and broadband. Based on our strong subscriber base, we plan to pursue growth centered on efforts to acquire high value-added subscribers, such as increasing the share of giga internet users.
Jin-won Kim (CFO and Head of Corporate Planning)
마지막으로 주주 환원은 금번 이사회에서 일 분기 배당금을 지난 분기와 동일한 주당 팔백삼십억 원으로 확정하였습니다.
Hee Jun Chung (Investor Relations Officer)
Finally, for shareholder returns, the board determined the first quarter DPS to be the same as the previous quarter at KRW 831.
Jin-won Kim (CFO and Head of Corporate Planning)
당사는 앞으로도 AI Company로의 도약과 전환이 기업 가치 및 주주 가치 극대화로 이어질 수 있도록 최선을 다하겠습니다.
Speaker 9
We will do our best to ensure that transformation into an AI company will lead to maximization of corporate value and shareholder value.
Jin-won Kim (CFO and Head of Corporate Planning)
투자자와 애널리스트 여러분의 지속적인 관심과 성원을 부탁드립니다. 감사합니다.
Hee Jun Chung (Investor Relations Officer)
We ask for your continued support and encouragement. Thank you.
Speaker 9
Okay, now we will begin the Q&A session.
Hee Jun Chung (Investor Relations Officer)
We will now begin the question and answer session.
Operator (participant)
지금부터 질의응답을 시작하겠습니다. 질문을 하실 분은 전화기 버튼의 별표와 일 번을 눌러주시기 바랍니다. 질문을 취소하시려면 별표와 이 번을 누르시면 됩니다. Now Q&A session will begin. Please press star one. That is star and one if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two. That is star and two on your phone. The first question will be provided by Soojin Kim from Mirae Asset Securities. Please go ahead with your question.
Soojin Kim (Analyst)
I am Kim Soojin from Mirae Asset. Thank you very much for giving me this opportunity to ask you questions. The first question is related to your shareholder return policy for year 2023. At the last conference call, you mentioned that you would consider the possibility of share buyback by utilizing income coming from Hana Financial Group and SK Broadband. You did not mention about this in your initial presentation. I'd like to understand what your plans are regarding the shareholder return policy in terms of the timing and the method. The second question is related to the recently launched if home service that you announced last week. I can see that if home is very similar to Asai World in a sense that users will have their personalized spaces on your Metaverse platform.
I'd like to understand how this will lead to your monetization of the Metaverse business and your business model development. Thank you.
Jin-won Kim (CFO and Head of Corporate Planning)
Thank you very much for your question. As per your question on our shareholder return policy, we mentioned, yes, about the potential share buyback at the last conference call. The market would like to know more about this. Currently we have the dividend yield of more than 7%, which means that our stock price is rather undervalued. We still have in mind a potential share buyback program going forward. As per specific timing and the size of share buyback, these are subject to a board approval, so I cannot really give you specific details at this point in time.
As you mentioned, we have enough pool of financial resources, including the dividend income coming from SK Broadband and Hana Financial Group, and we have improvement in the earnings over the past year. When it comes to the specific details, we will consider various factors, including the stock market or stock price trend and the overall business environment and the cash flow to determine the optimum time of the share buyback. In addition, we introduced a new shareholder return policy at the time of the split off. This year is the third year since we have been implementing the existing shareholder return policy.
Based on our past experiences, we understand that if a share buyback is done on a temporary basis, it may drive up the stock price momentarily, but it has some limitations as to increasing the corporate value in the medium to long term. In consideration of our new shareholder return policies, including dividend payout, we are considering how we can create more sustainable shareholder return policy, including a share buyback. After active discussions at the board, we will come up with a decision. We will make sure to communicate with the market when we have more details and concrete plans after the board discussions.
Soojin Kim (Analyst)
Foreign language.
Speaker 9
As for shareholder return in this year, 2023, as I mentioned in my presentation, we are considering a very stable quarterly dividend, and the first quarter dividend amount is DPS is KRW 831 per share.
Soojin Kim (Analyst)
Foreign language.
Speaker 9
Therefore, our annual dividend payout size is going to be similar to the previous year. We continue to discuss various options to maximize shareholder value and shareholder return, including the potential share buyback. We will continue to do our best to return more to our shareholders.
Soojin Kim (Analyst)
Foreign language.
Speaker 9
Regarding your question on our plans for the Metaverse platform, Mr. Yang Maeng-seok, Head of Metaverse Office, will address the question.
Soojin Kim (Analyst)
Foreign language.
Speaker 9
Hello, I am Yang Maeng-seok, Head of Metaverse Office. Thank you for your question.
Maeng-seok Yang (Head of Metaverse Office)
Foreign language.
Speaker 9
The if home service that we recently launched is basically a social networking or a social media platform utilized, the 3D spaces. In if home, users can create their own 3D virtual space, and they can decorate their space using various items. This is basically creating their own space virtually.
Maeng-seok Yang (Head of Metaverse Office)
Foreign language.
Speaker 9
There in this if home space, users can post various writings, and they can use 3D frames to share photos. In this way, they can continue to share their everyday experiences and their thoughts and their views, and they can share these feed with others.
Maeng-seok Yang (Head of Metaverse Office)
Foreign language.
Speaker 9
By utilizing these features, users can invite their friends over to their if homes, and they can also visit other homes of their friends. In this way, they're engaged in new types of social activities.
Maeng-seok Yang (Head of Metaverse Office)
Foreign language.
Speaker 9
Even though this is a very new product, we are receiving various positive feedback, because users find a lot of enjoyment in decorating their own spaces and visiting their friends' homes and singing together in these spaces.
Maeng-seok Yang (Head of Metaverse Office)
Foreign language.
Speaker 9
As users continue to decorate and nurture their virtual spaces and engage in various social activities, they will be motivated to utilize various services and keep coming back to this platform. In this way, there will be increasing needs to have unique items and differentiated items to express their own personality. Such demand and need is expected to bring about benefit in terms of the economic system that we're planning to introduce in the second half of the year.
Maeng-seok Yang (Head of Metaverse Office)
Foreign language.
Speaker 9
As for the economic system that we're planning to introduce in the second half of the year, there are three main parts. The first part is offering a 3D content marketplace where users can create and sell avatars and spaces and other motion-related features. The second part is where they can purchase premium access and premium privileges, such as getting access to singing rooms and other paid spaces. The third part is about sponsoring influencers and celebrities that they want to support.
Maeng-seok Yang (Head of Metaverse Office)
Foreign language.
Speaker 9
In addition, we're planning to apply the NFT technology in terms of content, including avatar costumes and other decorative items. Users can purchase unique content created by creators using NFT, and this is expected to bring about more revenue coming from this platform. This will also attract a larger number of creators joining this platform, which will lead to creation of a more of a creator-centered platform as well. Thank you.
Operator (participant)
The next question will be presented by Joonsop Kim from KB Securities. Please go ahead with your question.
Speaker 9
I am Kim Joonsop from KB Securities. Thank you for the opportunity to ask questions. I have 2 questions. The first question is the impact of the recent price plans that you've introduced. I'd also like to know if you have any plans to introduce any new additional price plans going forward. The second question has to do with your AI business. Recently there was a presentation by SK Telecom at the MWC 2023, and since that presentation, I wonder if there have been any major updates. Thank you.
Thank you for the questions. As for the first question regarding new price plans, Kim Ji-hyeong, Head of Integrated Marketing Strategy Office will address the question. The second question will be addressed accordingly.
Hello, I am Kim Ji-hyeong, Head of Integrated Marketing Strategy Office.
The 3 new 5G price plans that we introduced recently, are related to broadening the options for price plans so that customers can decide on a price plan according to their own usage patterns. We expect that these new price plans will help lessen the burden on the part of the customers and increasing benefits that they can enjoy. This will lead to a higher level of satisfaction in terms of the use of 5G services. It will bring about very positive benefits. Following the senior, the price plan for the senior customers, we launched a new 5G customized price plan on May 1. This is about bringing down the gap between 59 price plan and 69 price plan.
That 69 price plan users can choose a more reasonable price plan depending on their usage pattern. The price plan for the youth that will be introduced in June, are focused on providing more customized benefits for the needs of the young customers so that, this will gain more support and more participation from younger customers of SK Telecom. In short, the diversification of the 5G price plans, can lead to higher utilization of 5G services and better customer retention. When it comes to the impact of such new price plans on our performance, it is not easy to give you any specific answer in terms of whether it is positive or negative, but we'll have to see the trend in the medium and long term.
As for your question on our future price plan, related initiative, we announced a new set of price plans in March, and some of them are not yet launched, including the youth price plan that is going to be introduced in June. I believe it is a little too early for us to discuss any further price plan related ideas. We have not yet made any internal review about this. As I mentioned before, the 5G market has become more mature now. It is only natural that we come up with more variety of price lineups and price plans so that we can attract more subscribers and offer more competitive prices.
Ji-hyeong Kim (Head of Integrated Marketing Strategy Office)
Uh,
Speaker 9
That is why we have offered new price plans and data plans, depending on our the refined customer segments, including the direct price plan and price plans for the youth and senior customers. In our price plan package, we already have price options that are in the ranges of KRW 30,000-KRW 40,000. At the same time, we understand that a lot of customers prefer to go for unlimited data plans because they want to enjoy 5G services and variety of 5G related benefits without having to be concerned about data limit. We also see that the size of customers data usage continues to increase. These are some of the factors that we will consider when we design new price plans in the future.
Moving on to your question regarding our AI strategy, last year, yes, SK Telecom announced our new AI vision, and that was also when ChatGPT became a big buzzword in the market. Now the market is being led by AI, and AI technology is advancing very rapidly. In retrospect, I would like to say that SK Telecom has rather a long history of being involved in AI development and AI services. For one, in 2016 we launched an AI speaker, NUGU, and in 2019 we applied COVERT, which is our own large language model, to the customer service chatbot. It shows that for the past several years, SK Telecom has been accumulating capabilities by developing its AI services and technology.
Based on our own capabilities and technology, we were able to launch ADOT, which is based on a hyperscale language model. This was a preemptive move that allowed us to quickly ride on the wave of AI, including ChatGPT. Against this backdrop, we would like to employ a two-track strategy. On one part, it may be a little too early to talk about this, but we also need to respond to the potential technology dependency issue at the national level. There are more specific domain related large language models that are being developed. In response to these developments, we need to continue to advance and develop our own hyperscale language model. That's one track.
The other track is utilizing partnerships and collaboration with big tech companies because AI technology is advancing rapidly and hyperscale language models, including ChatGPT, are being introduced in the market. The recent investment in Scatterlab is also part of this two-track strategy. This has brought us a new core technology that we did not have in the past. Likewise, we will continue to ride the waves of technological development by investing in advancing our own hyperscale AI model. At the same time, we will explore collaborative opportunities with external partners. In this way, we will be able to accumulate AI capabilities in a more efficient manner so that we can expand service business models based on AI that can be favored and enjoyed by our customers.
Ji-hyeong Kim (Head of Integrated Marketing Strategy Office)
Yeah.
Speaker 9
Regarding more technical aspects of our AI business, we haven't had much of an opportunity in the past. I would like to use this opportunity to introduce Song In Hyuk and Kim Yong Jun, who are in charge of ADOT strategy and ADOT technology to give you more details. Hello, I am Song In Hyuk, Head of Project Management Office and in charge of ADOT advancement. I'd like to give you some more details in terms of service, global expansion and technology. First of all, regarding our service, we made a preemptive move of launching and operating ADOT last year. We have been utilizing A-ADOT and using advanced AI technology. We are preparing for a major update consecutively starting from June this year. First of all, we're going to have an overhaul of UX based on customer behaviors.
This includes a more personalized home screen and a more user-friendly UX transformation, as well as allowing younger users under the age of 14 to join the platform, as well as providing social ID feature. These will help bring down the entry barriers. Secondly, we will continue to launch AI tech-based services that only a telco operator can provide. In the 1st quarter, we already launched various services, including English language learning and professional baseball, multi-play game, and collaborative character. In the 2nd half of the year, we are going to offer new services, including AI telephone, where you can get briefed on the content of the conversation by utilizing the unique assets that only telcos have. Third, we would like to offer more natural smart conversations using an AI agent.
We have this strategic partnership with Scatter Lab, and through this partnership we are planning to launch a new agent or AI agent that is able to hold empathetic conversation in June. This will offer conversations not only in terms of knowledge, but also emotion and empathy. At the same time we are going to have a major update of the large language model that SK Telecom based on the accumulated experiences, and it is going to be presented in June. The next topic is global. We are going to pursue global expansion by expanding the AI ecosystem and global presence expansion through collaboration with global telco companies and big tech companies. First of all, we would like to establish a global telco alliance.
At the MWC in February, we had meetings with various overseas telecom operators. We made a proposal to create an alliance to build, jointly build differentiated AI services by utilizing their own services and technology capabilities. We were received very positively from these telco, potential telco partners. We're going to soon announce this alliance officially. Secondly, we're going to continue to pursue a collaboration with big tech companies. We are currently pursuing partnerships and collaboration with not only the telecom operators, but also big tech companies, including those specialized in large language models and AI. In doing so, we can further advance our technology, and we will be able to accelerate global expansion at a scale by pulling off capabilities of our partners.
Kim Yong-hun (Head of AI Technology)
네, 안녕하십니까. A. 테크 담당 Kim Yong-hun입니다.
Speaker 9
Hello, I am Kim Yong-hun, Head of A. Technology.
Kim Yong-hun (Head of AI Technology)
앞서 말씀드린 바와 같이 ADOT에서는 향후 자체 기술 고도화와 외부 파트너 기술 협력을 병행하는 투 트랙 전략을 추진하기로 하였습니다.
Speaker 9
As was mentioned previously, for A., we will employ a two track strategy, in which on one part we will continue to advance our own technology and at the same time pursue technology partnership with external partners.
Kim Yong-hun (Head of AI Technology)
이는 최근 생성형 언어 모델은 과거의 일년 치 혁신이 일주일 만에 이루어질 만큼 발전 속도가 매우 빨라 이를 catch up 하기 위해서 당사는 자체 기술과 데이터를 축적해서 진화시키는 한편, 외부 파트너와의 적극적인 협력도 병행하기로 결정하였습니다.
Speaker 9
When it comes to the generative language model, you may see that the amount of innovation that we used to have in one year is taking place in just one week. The speed of development is very rapid. In order to catch up to this rate of development, we will continue to evolve our own technology and accumulate data while at the same time actively pursuing collaboration with external partners.
Kim Yong-hun (Head of AI Technology)
다음으로는 먼저 자체 기술 고도화에 대해서 말씀드리겠습니다.
Speaker 9
First of all, about how we will advance our own technology.
Kim Yong-hun (Head of AI Technology)
당사 자체 기술은 빅테크들이 사용적인 기술과 데이터 훈련 방식을 적용하여 지식 대화 능력을 고도화 중에 있습니다.
Speaker 9
As for our own technology, we're applying data and learning models used by big tech companies to expand domain related expertise.
Kim Yong-hun (Head of AI Technology)
기존의 KRW 18 billion이던 자체 large language model을 상반기 중에 KRW 39 billion 모델로 upgrade할 예정이며, 언어 모델 기술의 고도화의 핵심 기술인 인간 피드백 기반 강화 학습을 활용하여 지속 고도화할 예정입니다.
Speaker 9
Specifically, we used to have our own large language model that was 18 billion. We're going to upgrade that to 39 billion in the first half of this year. We will continue to evolve our language model by utilizing the reinforcement learning method based on human feedback, which is critical for advancing language models.
In addition to accurately connecting to tasks that match customer requests, anticipating that various forms of large language models will emerge in the future, an integrative ranker that connects language models suitable for a multi-language model structure will also be developed within the year to advance to more natural conversations.
We're also planning to develop an integrative ranker within this year so that we can connect customers with very specific tasks that they need and also can provide an integration with and lead customers to the right language model because we expect that there will be multiple large language models in the future.
Kim Yong-hun (Head of AI Technology)
다음으로는 외부 파트너사와의 협력에 관해서 말씀드리겠습니다.
Speaker 9
Next, I'd like to comment on our plans for external partnerships.
Kim Yong-hun (Head of AI Technology)
연내 generative AI 기술을 선도하는 기업과의 협력을 통해 기술을 연계하기 위한 국내외 다양한 기업과 논의 중에 있습니다.
Speaker 9
We're currently in the process of having conversations with various domestic and overseas companies so that we can pursue cooperation with generative AI leading companies.
Kim Yong-hun (Head of AI Technology)
앞서 말씀드린 Scatter Lab과는 소셜 능력과 지식 대화 능력을 모두 갖출 수 있는 언어 모델을 공동 개발하는 등 기술적 협력을 지속할 예정입니다.
Speaker 9
We will jointly develop a language model that has strong social features and is able to provide conversation in the knowledge domain by working together with Scatter Lab.
Kim Yong-hun (Head of AI Technology)
감사합니다.
Speaker 9
Thank you.
Kim Yong-hun (Head of AI Technology)
네. 교환. 현재 그 질문 대기 중이신 분이 계신가요?
Operator (participant)
현재 한 분 대기 중입니다.
Kim Yong-hun (Head of AI Technology)
네. 한 분까지 질문받고 마치도록 하겠습니다.
Operator (participant)
다음으로 질문해 주실 분은 NH투자증권의 안재민 님입니다. The last question will be presented by JaeMin An from NH Investment & Securities. Please go ahead with your question.
Jae-min Ahn (Equity Research Analyst)
안녕하세요. NH투자증권의 Jae-min Ahn입니다. 질문 기회 주셔서 감사합니다. 최근에 이제 제4 이동통신에 대한 얘기가 계속 조금씩 흘러나오는데요. 현재 뭐 현황들이나 정부의 입장이나 이런 것들 좀 파악하시고 있는 부분이 있으면 말씀해 주시면 감사하겠고, 저희 입장도 같이 언급해 주시면 감사하겠습니다.
Speaker 9
I'm Jae-min Ahn from NH Securities. Thank you for the opportunity. Recently there have been some talks on the potential, the fourth telco in Korea. I'd like to ask you to give us some update on the current situation, your take on the Government's position and your response strategy?
Kim Yong-hun (Head of AI Technology)
네, 제사 이동통신사와 관련해서는 뭐 종종 뭐 기사화되고 있어서 아마 좀 관심이 좀 있으실 텐데, 이 부분에 대해서는 저희 이 업무를 담당하고 계시는 CR 전략의 우리 권영상 담당께서 답변을 해주시겠습니다.
Speaker 9
Yes. There have been some media reports about the introduction of a potential number for telco in Korea. I can see that there is some interest in the market. Regarding that, Kwon Youngsang, Head of Corporate Strategy Office will address the question.
Youngsang Kwon (Head of Corporate Strategy Office)
네, 안녕하세요. CR 전략을 맡고 있는 권영상입니다. 정부는 금년 1월 달에 사업자 간 경쟁 촉진과 28 GHz 대역의 활용을 위해서 신규 사업자 진입을 검토하고 있음을 밝혔었고요.
Speaker 9
I'm Kwon Youngsang, Head of Corporate Strategy Office. In January this year, the government mentioned that they're considering the potential license to another, a new, telco in Korea in order to facilitate competition in the market and utilize 28 GHz of bandwidth. This is something that the government is pursuing at the policy level, so I hope that you will understand that it is not our position as a telco to express any explicit view. In January, the government announced a plan to invite a new player for the telecom market, and they're planning to announce that the frequency allocation plan in June. We understand that some businesses are considering this, but we will have to wait and see until June when the specific announcement is made by the government.
This concludes the earnings conference call for the first quarter of 2023 of SK Telecom. I'm sure you may have some additional inquiries and questions. Please contact the investor relations team at SK Telecom. We'll do our best to address your questions. Thank you very much.