Major telecommunications firms in South Korea are speeding up asset sales as part of their strategies to seek new growth opportunities in the non-telecommunications market.
SK Telecom, the industry’s largest in terms of mobile subscription, announced Tuesday its sale of professional baseball team SK Wyverns to Shinsegae Group’s supermarket chain E-Mart.
The deal, estimated at 135 billion won, includes a 100 percent stake in the baseball team as well as the team’s property holdings worth about 35.3 billion won.
SK Telecom in 2000 took over the cash-strapped professional baseball team, then named Ssangbangwool Raiders, as a marketing effort for its then-booming telecommunications business.
The number of mobile subscribers in South Korea was 26 million at that time, which continued growing in the following decades. The figure reached 69 million as of end-2019, meaning an oversaturation, given the country’s total population of 51 million.
While the company no longer needs a mass marketing tool like a professional sports team, it has been trying to direct resources to business-to-business opportunities in new areas, such as platform, artificial intelligence, robotics and 5G-based solutions.
The company last year forged partnerships with global tech firms, including Microsoft, Amazon and Uber to strengthen its platform businesses.
Industry sources predicted that SK Telecom could leverage the 130 billion won proceeds from the sale for future mergers and acquisitions.
SK Telecom’s move comes as its rival KT Corp. last week approved the auction of its 44.85 percent stake in affiliate KT Powertel, valued at 40.6 billion won.
KT has chosen IDIS, a local security solutions provider, as a preferred bidder for its shares in the radio systems subsidiary, the company announced Friday. KT expects to finish the deal by the end of March this year.
With the equity sale, the KT too is expected to speed up corporate restructuring and increase investment in non-telecommunications businesses.
CEO Ku Hyeon-mo, who took office in March 2020, has said that the company aimed to grow its non-telecommunications businesses.
By Shim Woo-hyun (firstname.lastname@example.org