AI data centers (DCs) run by the three telecom companies are rapidly emerging as a new revenue source to supplement the saturated telecommunications market.
According to the telecommunications industry on the 14th, combined third-quarter AIDC revenue for SK Telecom, KT and LG Uplus came to 502 billion won. That is up 27% from the same period a year earlier (395 billion won). This is the first time the three companies' combined quarterly AIDC revenue has exceeded 500 billion won.
By operator, SK Telecom's strong performance stands out. SK Telecom's third-quarter AIDC revenue was 149.8 billion won, up 53.8% from a year earlier. KT's third-quarter AIDC revenue rose 20.3% year over year to 249 billion won. LG Uplus' AIDC revenue was 103.1 billion won in the same period, up 14.5%.
The telecommunications industry expects that at this pace, the three companies' combined annual AIDC revenue will top 2 trillion won for the first time next year. Demand for GPU servers for computation has surged as demand for training and inference of AI models soars, and steady growth in data center demand is being driven by the expansion of data storage and processing hubs by cloud and content corporations.
An industry official said, "About 80% of domestic data centers are operated by the three telecom companies," adding, "AIDC is emerging as a key new growth engine to make up for stagnation in existing telecom operations." The three companies' combined revenue last year was 58.997 trillion won, up only 1% from the previous year (58.04 trillion won). As growth in the telecom market stalled, a red light also came on for the three companies' profitability. Their combined annual operating profit last year was 3.4944 trillion won, down about 20% from the previous year (4.4008 trillion won).
The telecommunications industry expects the three companies' data center power capacity to roughly double within five years. That is because the three companies are aggressively expanding AIDC as a new business. SK Telecom, together with AWS, is building an AI-specialized data center in Ulsan and plans to expand cumulative capacity to more than 300 MW by 2030. KT will add new data centers in Gimpo and Pyeongchon and, in the mid to long term, secure more than 500 MW of infrastructure. Although specific operating scale has not been disclosed, LG Uplus is reportedly set to complete a new 50 MW-class data center in Paju in 2027.
The three companies' total data center power capacity currently reaches 460 megawatts (MW). KT operates the most with 16 centers (162 MW), followed by LG Uplus with 14 centers (160 MW) and SK Telecom with 8 centers (137 MW).
Chae Hyo-geun, vice chair of the Korea Data Center Council, said, "With the spread of AI services and a surge in cloud demand, competition in data centers is intensifying worldwide," adding, "Based on stable network infrastructure, domestic telecom companies will also secure leadership in the AI-focused data center market."