Seoul, Korea, 20 May 2010 - SK Telecom (NYSE:SKM) announced that it signed a joint venture agreement on digital contents business as well as a MOU on IPE business with Telkom Indonesia (NYSE:TLK), the biggest wired and wireless service provider in Indonesia on May 20 at SK Telecom headquarters in Seoul.
SK Telecom, with its partner Telkom Indonesia, plans to create a joint venture to set up a Digital Contents Exchange Hub (DCEH) in the Indonesian market. DCEH is a new type of distribution hub for digital contents, such as music files, games and video clips, for not only consumers but also online music stores and local wired and wireless service operators. DCEH is expected to set a new trend of content consumption among Indonesian users based on advanced technology and user convenient features which have a strong competitive edge over other Indonesian local players.
SK Telecom plans to create a new business model that can satisfy all stakeholders of contents business -from consumers to service operators such as online music stores and local wired and even wireless service operators - based on its superb ICT capability, years of business experience and best practices achieved through operation of its online music store in the Korean market, MelOn.
Regarding the management of newly established joint venture, SK Telecom plans to provide solid management expertise in establishing the DCEH business platforms, sourcing digital contents and managing content service operation, investing a 49% share among the total capital of IDR 100 billion or KRW 12.5 billion. While Telkom, with a 51% share, will take the role of local marketing and sales, network, billing and product bundling. Telkom will also leverage its strategic dominant brand position in Indonesia to develop synergies within the Telkom Group of companies and utilize its strong local distribution channels.
Furthermore, SK Telecom signed an MOU with Telkom to pursue bilateral cooperation in realizing IPE business initiatives in Indonesia. The two companies, through this MOU, will continue to commit their business cooperation in a comprehensive manner by exploring other business areas identified as strategically necessary for the further development of bilateral relationship, not limiting their scope of cooperation to the four initial IPE industry domains including automobile, healthcare, education, and mobile workplace.
These joint operations are expected to drive further value for both parties as they match each others' needs and potential as quality business partners: SK Telecom announced its IPE strategy to improve efficiency in other industries including automobile, healthcare, finance, education, and mobile workplace, by utilizing mobile network technology. Telkom, the biggest land line and mobile operator in Indonesia has also recently announced its TIME (Telecommunication, Information, Media, Edutainment) Strategy to expand its business realm into new areas including the B2B sector.
SK Telecom expects that the cooperative relationship between SK Telecom and Telkom - Indonesia's leading fixed/wireless carrier - will not only allow SK Telecom to further its diverse IPE business experience and demonstrate successful business performances, but also provide a success milestone for SK Telecom's IPE business overseas. In particular, given the rapid growth of ICT infrastructure in the Indonesian market along with developments in potential IPE business domains such as automobile, healthcare, and education, it is anticipated that, once the IPE business initiative reaches a certain level, acquiring market leadership will be possible.
Telkom also hopes to gain leverage in its recent active pursuit of new B2B businesses, while meeting the diverse customer needs of Indonesia, which is the largest market in Southeast Asia with a population of 240 million and a GDP of approximately USD 969 billion. Telkom Indonesia currently serves over 110 million customers in Indonesia.
SK Telecom, through this opportunity of entering into the Indonesian IPE market, looks forward to further expanding not only into the IPE market in Southeast Asia, but also into markets in Americas and Europe by actively engaging in the enhancement of local industrial productivity.
Dong-Seob Jee, Executive Vice President of SK Telecom's IPE Business Division, said, "The cooperation with Telkom is the first overseas accomplishment of SK Telecom's IPE strategy which we hope can become the cornerstone to further develop our global IPE business. Going forward, SK Telecom plans to actively build our IPE business as a win-win convergence business model by continuing to work with various companies - home and abroad - to enhance the respective industry's productivity."
Telkom CEO Rinaldi Firmansyah said,"The DCEH contract to establish this new business with SK Telecom along with the signing of the IPE MOU is the first step towards a more extensive cooperation between the two companies. I hope that Telkom and SK Telecom, taking DCEH as a momentum, can work together in seeking to establish success references in various IPE areas not only in Indonesia, but throughout theAsia region. The agreements we signed today will create synergy with our TIME strategy, an aggressive path Telkom Indonesia is taking to offer more value to our customers".
