SK Telecom has announced a major restructuring of its artificial intelligence infrastructure business, spinning off the data center and submarine cable operations of its wholly owned subsidiary SK Broadband into a newly established company called SK Horizon.

Alongside the spinoff, the South Korean telecommunications giant has secured a combined USD 2.24 billion equity investment from funds managed by global investment firm KKR and the IMM Investment-Stonebridge consortium.

Structure of the Spinoff

SK Telecom will split SK Broadband into two entities: a surviving company, which will retain the SK Broadband name, and the newly established SK Horizon. Based on the book value of net assets, the spin-off ratio has been set at approximately 0.84 for the surviving company and approximately 0.16 for the newly established company.

The surviving SK Broadband will concentrate on fixed-line, media, and enterprise businesses, with plans to drive what the company describes as AX-based innovation across its product and service offerings. It also intends to actively identify new business models to accelerate future growth.

SK Horizon, whose name is intended to reflect an ambition to open new horizons in the AI data center sector, will be responsible for expanding AI data center infrastructure and pursuing the phased expansion of SK Broadband's existing submarine cable network.

Kim Seong-soo, CEO of the surviving SK Broadband, is expected to serve concurrently as CEO of SK Horizon, with the appointment to be finalized by a resolution of the Board of Directors following the company's establishment early next year.

SK Horizon's Infrastructure Mandate

SK Horizon will take on responsibility for expanding total AI data center capacity to 318 megawatts. This encompasses eight data centers already in operation, located in Seocho, Ilsan at two locations, Bundang, Gasan, Centum, Yangju, and Pangyo, as well as new AI data centers currently under construction in Ulsan and Guro. The company will also pursue the phased expansion of submarine cable infrastructure, which SK Telecom describes as essential for global AI businesses.

SK Telecom said the restructuring is designed to enhance operational expertise in data center management, accelerate decision-making, and enable more focused external investment into key business areas.

Investment Terms and Ownership Stakes

Under the definitive agreement, KKR and the IMM consortium will each invest in SK Horizon, with their combined investment totaling USD 2.24 billion. Upon completion of all phases of the investment, KKR will hold a 29% stake in SK Horizon, and the IMM consortium will hold a 20% stake. SK Telecom will retain management control as the largest shareholder with a 51% stake.

KKR is described as one of the most active infrastructure investors globally, with more than USD 100 billion in infrastructure assets under management and more than USD 70 billion invested across digital and power assets. KKR is making the SK Horizon investment primarily from its Asia Pacific infrastructure strategy.

The IMM Investment-Stonebridge consortium is made up of two South Korean investment firms. IMM Investment, founded in 1999, is a South Korean alternative investment firm with over USD 7.5 billion in assets under management spanning venture capital, growth equity, and infrastructure.

Stonebridge Capital, founded in 2008, is a South Korean private equity firm with approximately USD 2.61 billion in cumulative assets under management, with a focus on market-leading companies in structurally growing sectors.

A Three-Tier AI Infrastructure Structure

The announcement completes what SK Telecom describes as a full-scale AI data center business structure, built around three distinct entities operating at different levels of the infrastructure chain.

SK Telecom itself will oversee the group's overall AI data center strategy, setting business directions and managing collaboration with global technology companies. SK Horizon will handle the operational expansion of existing data center and submarine cable assets.

A third entity, SK Hyper, described as a specialized company established last July, will focus on business development for entirely new AI data center projects. SK Hyper has targeted 5 gigawatts of capacity for phased opening in 2029, with expansion toward a total capacity of 15 gigawatts planned for 2035.

Timeline and Next Steps

SK Telecom said it is aiming to complete the spinoff and formally establish SK Horizon in the first quarter of next year. To reach that milestone, the company will need to carry out a series of required procedures, including an extraordinary general meeting of shareholders and obtaining government approvals.

The company characterized the overall governance restructuring as a proactive measure intended to strengthen expertise in AI data center operations and position the group to more effectively secure funding across its key infrastructure business areas.

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