This may be the early stages of the artificial intelligence revolution, but the growing desire for cloud and data centers has become a much-needed growth driver for the telecommunications industry.
KT Corporation of South Korea is the latest report to report that the demand driven by artificial intelligence has led to healthy revenue growth.
The company stated in a document on Friday that its subsidiary KT Cloud, which operates both data center and cloud businesses, saw a 17.8% increase in revenue in the first quarter.
Admittedly, this is a relatively low base, with total sales for the quarter of only 172.2 billion Korean won (equivalent to 130 million US dollars). But the company’s Chief Financial Officer, Min Jang, stated in a earnings conference call last Friday that the company’s annual goal is to increase sales by 26% and profits by 51%. He stated that this growth is the result of the demand for hosting services from global OTT clients (including AWS and Microsoft) and new business process outsourcing projects.
The B2B business also saw growth, with sales reaching 852 billion Korean won (620 million US dollars), an increase of 5%, while the company’s “five future growth engines”, such as artificial intelligence contact centers, the Internet of Things, and intelligent mobility, increased by 4.9%, reaching 93 billion Korean won (68 million US dollars).
Min Jang stated that Korea Telecom also has a three-part strategy to become an artificial intelligence company.
One approach is to combine artificial intelligence with existing IT capabilities, such as adding artificial intelligence to customer service centers.
Another approach is to identify new business opportunities by applying artificial intelligence to IT business and data clouds.
He said, “In this field, we plan to develop specialized services and models for specific vertical fields such as finance and the public sector. We will also develop specialized solutions and models for business processes such as customer relationship management, enterprise resource planning, and search engine marketing.”
The final part is to apply artificial intelligence functions to its media and platform businesses. Currently, KT is developing a new and more targeted user experience based on user viewing patterns.
The company announced an operating profit of 506.5 trillion Korean won (equivalent to 370 billion US dollars), an increase of 4.2%, and a revenue increase of 3.3%, reaching 6.6 trillion Korean won (equivalent to 4.8 billion US dollars). Net profit increased by 27% compared to last year, which was affected by a non operating loss of 49 billion Korean won (35.9 million US dollars).
KT’s core wireless business saw growth in this quarter, with revenue increasing by 1.7% and ARPU increasing by 2.0%. South Korea currently has 9.9 million 5G users, accounting for nearly three-quarters of mobile phone users.