SK Telecom has teamed up with Uber to launch a new joint venture in the taxi market in South Korea that will also look ahead to future mobility technologies, such as flying cars.
Uber will invest a total of US$150 million in the as-yet unnamed venture and in SKT’s broader mobility business.
SKT is spinning off its mobility operations – which include the T Map platform, taxi hailing service T Map Taxi and other transportation and parking services – into a new unit provisionally known as T Map Mobility. Uber will invest $50 million in that business, while SKT will also look for other external investors to secure additional funding. The other $100 million will be ploughed directly into the JV. Subject to shareholder approval the business will be spun off on 29 December, while the JV is scheduled to start operating in the first half of next year, once it has received the regulatory green light.
“Korea was one of Uber’s first international markets and we are committed to fully realizing its potential,” said Uber CFO Nelson Chai. “Through our strong partnership with SKT, we will expand access to ride hailing services in the country, and bring better service to riders and drivers.”
The JV is light on specifics at present. According to SKT, the pair will build a platform to create opportunities in the taxi-hailing market by combining T Map Mobility’s network of drivers and mapping technology with Uber’s ride hailing technology and global operations expertise. And they have also pledged to explore new areas.
SKT and Uber have also agreed to create a world-class mobility platform through a newly-formed joint venture that will create opportunities in the taxi-hailing market in Korea and explore new areas, including future mobility services.
“We will work closely with companies with diverse capabilities to address current challenges in transportation, and ultimately usher in a new era of future mobility technologies such as flying cars,” said SKT chief executive Park Jung-ho.
As exciting as flying cars might be, this deal is about much more than future-gazing for SKT. The operator is essentially repositioning its mobility operations as a new core business area, which suggests a lot more focus in this area in the coming years and further diversification away from the traditional telco space.
SKT might be South Korea’s biggest mobile operator, but its mobile communications business is just one of its four pillars of operation, the others being media (including broadband), security and commerce. Mobility now represents its fifth pillar; it expects to generate synergies with its other businesses, it says, but more interesting is the grow rate it predicts. T Map Mobility is currently valued at around 1 trillion won (around US$873 billion) it says, but expects this to increase to KRW4.5 trillion, or close to $4 billion) as soon as 2025.
T Map Mobility will continue to provide its platform service in areas like parking, advertising, and usage-based insurance, as well as offering in-vehicle infotainment and in-car payment through T Map Auto; taxi-hailing services; and its all-in-one Mobility-as-a-Service (MaaS) offer. Looking ahead, it will work on new technologies such as vertical take-off and landing (VTOL), using its 5G, AI and T Map capabilities to provide route planning, 3D mapping at high altitudes and intelligent air traffic control systems.
SKT might be a telco at heart, but new mobility services are a far cry from simply providing phones and connectivity.