AI and Web3 move up the agenda for SKT and NTT Docomo

News this week from Japan and South Korea show how two of the industry’s leading operators are transforming their businesses and embracing new technologies to create paths for growth.

In South Korea, SK Telecom (SKT) unveiled a strategy this week that will place Artificial Intelligence (AI) at the heart of everything the operator does as CEO Ryu Young-sang laid out his plan to remake the operator into an “AI company”.

The operator expects a deeper embrace of the technology to spur growth opportunities and help it achieve a market value of 40 trillion won (US$29 billion) by 2026, which would be more than triple the company’s current market capitalization of about 11.3 trillion won (US$8 billion), according to The Korea Herald.

The move might not be surprising since SKT has driven innovative AI initiatives over the last several years. However, making AI the strategic centerpiece for the entire business is a unique move for the telecom industry.

The operator did not use the term “techco” to describe its business transformation, but the new strategy is the latest example of how telcos are diversifying into new areas, deploying new technology, and changing their business models and customer relationships.

Ryu presented three strategic initiatives that will infuse AI into the operator’s services and processes: transforming its core fixed and mobile, media, and enterprise businesses; expanding AI-based services; and developing new AI use cases.

In its core services business, SKT views the capabilities as being critical to revenue and customer growth. For example, the operator wants to make it easier for customers to search for, subscribe to, and use fixed and mobile products by applying AI to these processes and becoming what it calls an “AI MNO”.

SKT plans to transform its media business will be transformed by bringing together a diverse set of services, which range from IPTV to T-Commerce TV shopping, to create a unified content offering. In addition, it plans to develop an “AI Media Player” to deliver personalized content for customers.

The second strategic area involves augmenting its AI-based services with more engaging content and features to strengthen customer relationships. Plans include investments to add capabilities to the company’s AI digital assistant, called “A.”; further international expansion of its ifland metaverse service; and evolving T Universe into an “AI-based commerce subscription platform”.

The final part of the strategy will see the operator continue to invest in or acquire AI companies. A recent example is SKT’s purchase of a 20.8% stake in South Korea-based AI software company Konan Technology. By adding more in-house capabilities, SKT says it will be able to develop what it calls “AI Transformation (AIX)” use cases for different industries, such as robotics and “vision AI” in manufacturing or tools like its web-based “X-Caliber” service that analyzes veterinary x-rays using AI.

Docomo joins Web3 revolution

A report emerged this week that NTT Docomo is planning to invest $4 billion on Web3, the next-generation of Internet technology based on decentralized blockchains. The operator will establish a new company dedicated to developing Web3-based infrastructure and services that will start operations in 2023, according to the report.

Ahead of this reported big investment, Docomo announced a partnership with Accenture this week to increase the adoption of Web3 technology to address social issues. The companies will work together to establish a secure platform for Web3, provide training to meet demand for new skills, and promote Environmental, Social and Governance (ESG) issues, including regional development and the United Nation’s Sustainable Development Goals.

The partnership aspires to make Japan a leading Web3 market while promoting Web3 adoption around the world.

Motoyuki Ii, President and CEO of NTT DOCOMO described Web 3 as “the most impactful technological development since the Internet”. He said Docomo and Accenture will “revolutionize social infrastructure by utilizing blockchain and building a safe and secure Web3 environment.”