With the digital transformation efforts of enterprises and public organizations, along with increased internet traffic, the domestic cloud services market is anticipated to witness continuous growth. (Image credit: Kobiz Media)
SEOUL, May 21 (Korea Bizwire) —As South Korean companies continue their digital transformation campaigns, cloud services are playing a pivotal role in driving revenue growth within the telecom sector.
In the first quarter, cloud services made significant contributions to the revenue growth of SK Telecom and KT, according to industry reports. SK Telecom’s enterprise revenue, which includes cloud services, experienced a year-on-year growth of 5.8 percent, amounting to 386.2 billion won. Notably, cloud revenue alone saw a substantial increase of 22.3 percent, reaching 34.2 billion won.
KT Cloud, which separated from KT last year, recorded 148.7 billion won in revenue during the first quarter, playing a crucial role in boosting KT’s overall consolidated revenue. In addition to cloud services, KT Cloud also operates an Internet Data Center (IDC) business.
Of particular significance, KT Cloud recently secured a substantial investment of 600 billion won from IMM Credit & Solutions (ICS), marking the largest-ever investment in a domestic cloud services provider. The investment was driven by KT Cloud’s stable revenue generation and growth, highlighting the flourishing nature of the cloud services industry.
With the digital transformation efforts of enterprises and public organizations, along with increased internet traffic, the domestic cloud services market is anticipated to witness continuous growth.
With the digital transformation efforts of enterprises and public organizations, along with increased internet traffic, the domestic cloud services market is anticipated to witness continuous growth. (image: Korea Bizwire/Kobiz Media)
Kim Soo-jin, a researcher at Mirae Asset Securities, stated that SK Telecom has enhanced growth expectations in the cloud services sector following a significant order worth 8.1 billion won in the AI contact center (AICC) business, launched in the fourth quarter last year.
Kim Jun-seop, a researcher at KB Securities, mentioned that cloud sales have been consistently growing, with more than 90 percent of the cloud management service (MSP) business attributed to recurring subscription sales.
Additionally, Ahn Jae-min, a researcher at NH Investment & Securities, emphasized that growth-oriented businesses such as IDC, cloud services, AI, content, and real estate, which are non-telecom areas of strength, are set to be a focus for CEOs.
A representative from SK Telecom noted that cost-efficient technology that reduce existing cloud system expenses are gaining traction in the market, and SK Telecom, with its expertise in this domain, is expected to achieve significant revenue growth in the second half of the year.
Furthermore, an industry insider emphasized that the demand for cloud infrastructure and services is projected to continue expanding due to the recent revitalization of the AI industry.
Kevin Lee (kevinlee@koreabizwire.com)
