SKT sees sales from B2B services in H2

SEOUL (Reuters) - South Korea's SK Telecom (017670.KS) expects to see its new business-to-business services generate revenue starting in the second half of this year, with fuller sales coming in 2011, a senior executive told Reuters.

SK Telecom, the country's top mobile carrier, is also in talks with companies in the United States, China and other Asian and European countries to provide advanced telecom and networking services for the education, healthcare and auto industries, SK's executive vice president Jee Dong-seob said at the Reuters Global Technology Summit on Wednesday.

SK, which counts 25 million mobile subscribers out of South Korea's 49 million population, is developing new business models utilizing its network and emerging technologies to grow out of the saturated mobile service market, where it competes with KT Corp (030200.KS).

"Telecom companies are trying not to become a dumb pipe," said Jee, a former M&A consultant. "With smartphones booming and networks improving, we are finding new opportunities in providing ways to enhance productivity of other firms in the new connected environment."

But those new businesses could take years to take shape, depending on industries. Its move to expand overseas could also put SK in indirect competition with global giants in IT services such as IBM (IBM.N).

"We will be a different type of service provider from IBM and Accenture (ACN.N)," Jee said. "As a telecom operator we can provide connectivity, devices, sensing and other core telecom technologies."

SK Telecom has an ambitious target to generate 20 trillion won ($17.5 billion) in revenue in 2020 from business-to-business IT and telecom services, which Jee is in charge of. SK Telecom's company-wide revenue was 12.1 trillion won in 2009.

"We can see revenue from these new services in the second half this year, with more meaningful revenue coming next year," Jee said.

SK has identified companies in the retail, financial, auto, education and healthcare sectors as future clients. In overseas markets, it will discuss business-to-business service models with both industry players and telecom companies.

"I think the timing is finally ripe for the healthcare industry, after all the years we talked about ubiquitous healthcare."

But Jee admitted competition would be tough in key markets such as the United States with the new business. In China, SK will focus on the education industry, among others, he said.

In the home market, SK Telecom plans to introduce a connected workforce service, which provides seamless fixed and wireless connection and solutions between a company system and its staff anywhere, for SK Group companies in the third quarter.

It is also talking to other local conglomerates such as POSCO (005490.KS) to provide similar services, Jee said.

($1=1146.0 Won)

(Editing by Jacqueline Wong)