SK Telecom (SKT) is set to spin off a division of its subsidiary, SK Broadband, to establish a new entity named SK Horizon, which will specialize in AI data center (AIDC) infrastructure and submarine cable operations.
The South Korean telecom operator signed deals with global investment firm KKR and a consortium made up of IMM Investment and Stonebridge Capital for a combined investment of 3.08 trillion Korean won (US$2.24 billion) in the new company.
Once the transaction is complete, KKR and the IMM-Stonebridge consortium will hold 29% and 20% stakes in SK Horizon respectively, while SKT will retain management control of the company as its largest shareholder with a 51% stake.
SKT aims to complete the spin-off of SK Horizon from SK Broadband by the first quarter of next year, pending regulatory approvals and an extraordinary shareholders meeting.
SK Horizon will assume operation of eight existing data centers located in Seocho, Ilsan, Bundang, Gasan, Centum, Yangju and Pangyo, as well as two new AIDCs currently under construction in Ulsan and Guro. These facilities will provide a total IT capacity of 318MW.
SK Horizon will also pursue the phased expansion of its submarine cable infrastructure, which is vital for global AI businesses.
Governance restructuring
According to SKT, the latest spin-off completes the governance restructuring required to allow the telecoms operator to accelerate its expansion into the AIDC sector. Last month, SKT established SK Hyper, a new $510 million subsidiary focused on building GW-scale AI data centers across South Korea, with the aim of reaching a total capacity of 15GW by 2035.
“This governance restructuring is a proactive measure aimed at strengthening expertise and enabling faster execution in the AIDC business,” Kim Seong-soo, newly appointed CEO of SK Horizon, in a statement released on Thursday.
“As an AIDC infrastructure company, we will continue to scale up SK Horizon and grow it into Korea’s leading data center operator,” he added.
Kim is also the CEO of SK Broadband, which will now focus on its fixed-line, media and enterprise businesses.
Under the governance restructuring, SKT will oversee the SK Group’s AIDC business as a whole, setting business strategies and directions, and collaborating with major global tech companies. SK Horizon will be responsible for expanding infrastructure, including existing key AIDCs and submarine cables, while SK Hyper will focus on business development for new AIDC projects.
