SK Telecom (NYSE:SKM) and Deutsche Telekom AG today announced that they have signed a cross investment agreement yesterday to further strengthen their competitiveness in 5G and deepen their cooperation in the global market.
The agreement signing ceremony took place on October 22, 2018, at SK Telecom’s Seoul headquarters with the participation of Park Jung-ho, President and CEO of SK Telecom, and Timotheus Höttges, CEO of Deutsche Telekom.
The CEOs of the two companies also held a town hall meeting on the same day with the participation of SK Telecom employees to discuss the current issues in the ICT industry and share their insights on digital transformation, business strategy and corporate culture innovation.
Under the agreement, SK Telecom plans to invest in MobiledgeX, a subsidiary of Deutsche Telekom, and Deutsche Telekom plans to invest the same amount in ID Quantique (IDQ), SK Telecom’s strategic partner in quantum cryptography communication technology.
MobiledgeX is an edge computing company founded by Deutsche Telekom AG and headquartered in Menlo Park, California, focused on delivering developer-facing edge computing services.
ID Quantique, based in Switzerland, is the global leader in the field of quantum cryptography communication. SK Telecom has become the major shareholder of IDQ by acquiring more than 50% of IDQ’s shares in February 2018.
SK Telecom and Deutsche Telekom have made their cross-investment decision to gain leadership in the upcoming era of 5G by offering specialized 5G services with ultra-low latency, while addressing potential security threats against financial institutions and public agencies.
Unlike the pre-5G era, which was mainly about communication between people, the 5G era will be marked by communication between people and things, as well as communication between things, which will support intelligent services like connected car, smart factory and wearable devices.
Against this backdrop, the two companies have decided to share their technologies and knowhow to gain leadership in the global 5G market.
Deutsche Telekom is considering the adoption of quantum cryptography communication system. SK Telecom and Deutsche Telekom are currently in the process of qualifying IDQ’s quantum cryptography technologies on their respective trial networks.
With the use of quantum cryptography, the security of national infrastructure, financial networks, data centers and medical institutions will be significantly enhanced. Going forward, quantum cryptography will be applied to more areas.
Moreover, SK Telecom and Deutsche Telekom are reviewing the idea of utilizing mobile edge computing technologies to reduce data transfer time. For instance, with mobile edge computing, companies can conduct on-site monitoring of disaster-affected areas and respond faster to traffic accidents.
The two companies will also strengthen their cooperation in diverse new business areas including AR and VR. They will exchange their knowhow and expertise in realistic media technologies and support SK Telecom’s efforts to launch its media solutions in the European market.
Furthermore, SK Telecom and Deutsche Telekom will seek diverse investment opportunities to expand the global ICT ecosystem by providing joint support to promising startups of Korea and Europe to help them advance into overseas markets.
“SK Telecom is pleased to enter into a cross-investment agreement with Deutsche Telekom as it will serve as a valuable opportunity for us to further solidify our 5G leadership in the global market and drive new growth,” said Park Jung-ho, President and CEO of SK Telecom.
“We look forward to intensifying our successful cooperation with SK Telecom. The partnership will help both companies to strengthen our global technology leadership and bring 5G and other innovative services to our customers,” stated Timotheus Höttges, CEO of Deutsche Telekom.
▶About SK Telecom
Established in 1984, SK Telecom is the largest mobile operator in Korea by both revenue and number of subscribers. As of December 2017, the company holds around 50 percent of the market, with 30.2 million mobile subscribers including 22.87 million LTE subscribers. It has reached KRW 17.520 trillion in revenue in 2017. SK Telecom has led the advancement of mobile technologies ranging from 2G to 4G, and is currently setting important milestones in its journey to 5G. The company is not only leading innovation in the field of mobile network, but also providing IoT, media, home and platform services. SK Telecom is determined to play a significant role in the Fourth Industrial Revolution by achieving innovations and promoting shared growth with other players in the industry.
▶About Deutsche Telekom
Deutsche Telekom is one of the world's leading integrated telecommunications companies, with some 168 million mobile customers, 28 million fixed-network lines, and 19 million broadband lines. Deutsche Telekom provides fixed-network/broadband, mobile communications, Internet and IPTV products and services for consumers, and information and communication technology solutions for business and corporate customers. Deutsche Telekom is present in more than 50 countries with a staff of some 216,000 employees throughout the world.
▶About ID Quantique
Founded in 2001 as a spin-off of the Group of Applied Physics of the University of Geneva, ID Quantique is the world leader in quantum-safe crypto solutions, designed to protect data for the future. The company provides quantum-safe network encryption, secure quantum key generation and Quantum Key Distribution solutions and services to the financial industry, enterprises and government organizations globally. IDQ’s quantum random number generator has been validated according to global standards and independent agencies, and is the reference in highly regulated and mission critical industries - such as security, encryption, critical infrastructure and IoT- where trust is paramount.
Additionally, IDQ is a leading provider of optical instrumentation products, most notably photon counters and related electronics. The company's innovative photonic solutions are used in both commercial and research applications. IDQ’s products are used by government, enterprise and academic customers in more than 60 countries and on every continent. IDQ is proud of its independence and neutrality, and believes in establishing long-term and trusted relationships with its customers and partners.
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