SK Telecom separates 11Street from SK Planet to catch up with Amazon

SK Telecom’s board of directors decided to split money-losing subsidiary SK Planet into an e-commerce and a data tech firm as part of strategies to boost the online shopping business, it said Tuesday. 

The parent company also said it has helped finance 500 billion won ($448 million) for SK Planet’s e-commerce platform 11Street with a goal of developing the platform as the Korean version of Amazon. 

The mobile carrier attracted the investment from various investors including private equity H&Q Korea. 

Along with the investment, SKT decided to carry out an organizational restructuring for SK Planet that has been operating the online shopping platform at a boardroom meeting. 

SKT will separate 11Street as a new corporation from its operator SK Planet, while merging its data-based marketing platform business -- OK Cashbag and Syrup -- with SKT’s subsidiary SK Techx. 

SK Techx is a business-to-business ICT solution firm. 

“The restructuring will enable SK Planet to respond more swiftly to the industrial changes and enhance the system for growth across SKT subsidiaries,” the telecom company said in a press release. 

While 11Street will seek growth as an independent e-commerce business, SK Planet will find its identity as a data-focused tech firm. 

Although 11Street’s value is estimated to be around 2 trillion won worth in the market, the company has been posting operating losses in recent years. 

SKT is planning to apply its artificial intelligence and other ICT technologies in order to improve the e-commerce business and provide improved open market services, including launching a new mobile payment service dubbed “11Pay.” 

The telco’s recent partnerships with convenience store operator BGF and establishment of a joint venture for online fresh food delivery service Hello Nature, are considered part of its plans to strengthen 11Street’s competitiveness. 

The split and merger plan for SK Planet will need approval from its shareholders at a general meeting slated for July 31. 

(song@heraldcorp.com)