SKT, Deutsche Telekom, e&, Singtel, and SoftBank Corp. Announce Plan to Establish a Joint Venture

Rhea-AI Summary

SK Telecom (SKM) and other leading telecommunications companies announce the establishment of a joint venture to develop Large Language Models (LLMs) for telcos. The goal is to enhance customer interactions through digital assistants and chatbots, targeting a global customer base of 1.3 billion across 50 countries.

Market Research Analyst

The formation of the Global Telco AI Alliance and the subsequent joint venture to develop Large Language Models (LLMs) represents a strategic shift in the telecommunications industry. This initiative is poised to enhance customer service capabilities through advanced digital assistants and chatbots, potentially reducing operational costs and improving customer satisfaction. The focus on multilingual models underscores the global nature of the telecom market and the need for personalized customer experiences across different regions.

From a market perspective, the alliance's reach of approximately 1.3 billion customers across 50 countries signifies a substantial market opportunity. This collaboration can lead to shared technological advancements, cost savings through economies of scale and a competitive edge in AI-driven customer service solutions. It is important for stakeholders to monitor the adoption rate and effectiveness of these LLMs in improving customer engagement and reducing churn, which are critical metrics for the telecom sector.

Technology Analyst

The development of LLMs tailored for the telecom sector emphasizes the industry's investment in AI to address specific operational challenges. LLMs are sophisticated algorithms capable of understanding and generating human-like text, making them ideal for customer service applications. By optimizing these models for languages such as Korean, English, German, Arabic and Japanese, the alliance is tackling the linguistic diversity barrier, which is a significant hurdle in providing seamless customer support in a global context.

It's also indicative of the telecom industry's push towards digital transformation, where AI and machine learning play pivotal roles. For investors, the technological leap could translate into long-term value creation if these AI solutions lead to improved efficiency and customer retention. However, the implementation and integration of such advanced AI systems will require substantial investment and time, with the payoff being contingent on the technology's performance and customer acceptance.

Financial Analyst

The announcement of the joint venture could have immediate financial implications for the involved companies. Investors will be keenly observing the capital allocation for this initiative and the impact on the companies' financials. Joint ventures can lead to shared costs and risks, which might be favorable for the financial health of the companies in the short term. However, the return on investment is a critical aspect that will be evaluated over the long term.

The potential revenue streams from licensing the technology or deploying it within their own customer bases could be significant. The joint venture might also explore opportunities for monetization beyond the founding members' markets. The success of these LLMs in reducing customer service costs while maintaining or improving quality will be a key determinant of the financial impact. Additionally, the market will assess the implications of this strategic move on the competitive landscape and whether it will lead to market consolidation or increased competition among telecom providers.

• Joint Venture Company to develop Large Language Models (LLM) specifically for telecommunications companies 
• Joint Venture Company to be established within this year
• Initial fine-tuning of models takes place 

BARCELONA, Spain, Feb. 26, 2024 /PRNewswire/ -- SK Telecom (NYSE:SKM, "SKT"), Deutsche Telekom, e& Group, Singtel and SoftBank Corp. today held the inaugural meeting of the Global Telco AI Alliance (GTAA) at MWC Barcelona 2024 and announced their plans to establish a joint venture.

The meeting was attended by SK's Chairman Chey Tae-won, SKT's CEO Ryu Young-sang, Deutsche Telekom's CEO Tim Höttges and DT's Board Member for Technology & Innovation, Claudia Nemat, e& Group's Group CEO Hatem Dowidar, Singtel Group's CEO Yuen Kuan Moon, and SoftBank's CISO Tadashi Iida.  

Through the Joint Venture Company, the five companies plan to develop Large Language Models (LLMs) specifically tailored to the needs of telecommunications companies (telcos). The LLMs will be designed to help telcos improve their customer interactions via digital assistants and chatbots.

The goal is to develop multilingual LLMs optimized for languages including Korean, English, German, Arabic and Japanese, with plans for additional languages to be agreed among the founding members.

The joint venture plans to focus on deploying innovative AI applications tailored to the needs of the Global AI Telco Alliance members in their respective markets, enabling them to reach a global customer base of approximately 1.3 billion across 50 countries. Deutsche Telekom boasts about 250 million subscribers across 12 countries, including Germany and the U.S. The e& Group has 169 million subscribers in 16 countries across the Middle East, Asia, and Africa, while the Singtel Group has 770 million subscribers in 21 countries, including Australia, India, and Indonesia. 

The Joint Venture Company will be established within this year.  

Compared to general LLMs, telco-specific LLMs are more attuned to the telecommunications domain and better at understanding user intent. By making it easier for telcos to deploy high-quality generative AI models swiftly and efficiently, telco-specific LLMs are expected to help accelerate AI transformation of various telco business and services, including customer service.  

The LLMs are currently being optimized. Telcos' customer service data is used to fine-tune the model for telco-specific questions. This is because tariff and contract models, information on special hardware such as the router, for example (e.g. How do I do a reset?) are rarely found in the general training data of the large models. But it's exactly this content that a telco bot needs to know. So that it is able to understand, summarize and respond to these specific concerns. 

This targeted training ensures the LLM understands the unique language and needs of telecom operators, paving the way for enhanced, personalized, and efficient customer experiences.  

"We as telcos need to develop tailored LLM for the telco industry to make telco operations more efficient, which is a low-hanging fruit. Our ultimate goal is to discover new business models by redefining relationships with customers. The Global Telco AI Alliance brings synergy to its members by allowing them to achieve more by working as a team," said Ryu Young-sang, CEO of SKT.  

"We want our customers to experience the best possible service. AI helps us do that. Already today, more than 100,000 customer service dialogs a month in Germany are handled by Generative AI. By integrating telco-specific large language models, our 'Frag Magenta' chatbot becomes even more human-centric: AI personalizes conversations between customers and chatbots. And our joint venture brings Europe and Asia closer together," said Claudia Nemat, Board Member Deutsche Telekom for Technology and Innovation.

"This is a monumental step for e& and for the Telco industry at large. From streamlining customer support interactions to enabling personalised recommendations, this multi-lingual LLM will revolutionise how businesses engage with customers", said Dena Almansoori, Group Chief AI and Data Officer, e& group. "In collaboration with our Global AI Telco Alliance partners, we look forward to shaping both the present and future of customer engagement and setting new standards for efficiency and innovation across the telecommunications landscape to better serve our customers and create meaningful impact."

"This promises to be a game changer not just for us at Singtel but for any telecom company out there looking to lift their customer experience beyond limited automated responses and generic chatbot interactions. This multi-lingual LLM tailored for telcos will greatly expand chatbot capabilities with relevant responses to customers' technical queries, freeing up service agents to deal with more complex customer issues and we intend to deploy this across the Singtel Group. With leading telcos from three different continents working on this innovative model, this unprecedented effort to scale AI development for the telecom industry would not have been possible had we all decided to go it alone," said Yuen Kuan Moon, Group Chief Executive Officer, Singtel. 

"Through a powerful alliance with industry leaders, we embark on a mission to revolutionize global communication, elevate service quality, and ignite a new era of technological innovation powered by AI. Together, we have the power to shape the future of telecommunications, empowering communities worldwide with seamless connectivity and boundless opportunities," said Hideyuki Tsukuda, Executive Vice President & CTO of SoftBank Corp.

About SK Telecom

SK Telecom has been leading the growth of the mobile industry since 1984. Now, it is taking customer experience to new heights by extending beyond connectivity. By placing AI at the core of its business, SK Telecom is rapidly transforming into an AI company with a strong global presence. It is focusing on driving innovations in areas of AI Infrastructure, AI Transformation (AIX) and AI Service to deliver greater value for industry, society, and life.

For more information, please contact skt_press@sk.com or visit our LinkedIn page www.linkedin.com/company/sk-telecom.

About Deutsche Telekom: https://www.telekom.com/konzernprofil 

About e& 

e& is one of the leading technology groups in the world. Boasting impressive financial figures for 2023, with consolidated net revenue reaching a staggering AED 53.8 billion and consolidated net profit surging to AED 10.3 billion, the Group's impeccable credit ratings reflect its strong balance sheet and track record of sustained success.  

Founded in Abu Dhabi over 48 years ago, the Group has a rich legacy as the pioneer in telecommunications in the UAE. Today, its footprint spans 16 countries across the Middle East, Asia, and Africa, making it a leading player in the industry.

Innovation is ingrained in e&'s DNA to create an unbreakable bond between communities using cutting-edge digital solutions, smart connectivity and advanced technologies. 

The Group has designed five strong business pillars that address various customer segments: e& UAE, e& international, e& life, e& enterprise and e& capital. Through these pillars, we strive to revolutionise the way people communicate, work and live by providing unparalleled services and exceptional experiences. 

At e&, we are committed to pushing the boundaries of what is possible and delivering measurable results that make a difference in people's lives.

To learn more about e&, please visit: https://eand.com/

About Singtel

Singtel is Asia's leading communications technology group, providing a portfolio of services from next-generation communication, 5G and technology services to infotainment to both consumers and businesses. The Group has presence in Asia, Australia and Africa and reaches over 770 million mobile customers in 21 countries. Its infrastructure and technology services for businesses span 21 countries, with more than 428 direct points of presence in 362 cities.

For consumers, Singtel delivers a complete and integrated suite of services, including mobile, broadband and TV. For businesses, Singtel offers a complementary array of workforce mobility solutions, data hosting, cloud, network infrastructure, analytics and cyber security capabilities.

Singtel is dedicated to continuous innovation, harnessing technology to create new and exciting customer experiences and shape a more sustainable, digital future.

About SoftBank

Guided by the SoftBank Group's corporate philosophy, "Information Revolution – Happiness for everyone," SoftBank Corp. (TOKYO: 9434) operates telecommunications and IT businesses in Japan and globally. SoftBank Corp. has 40 million mobile subscribers in Japan, and through its group companies, 61 million smartphone payment (PayPay) users, 85 million online media (Yahoo! JAPAN) users and 96 million communication app (LINE) users (as of February 7, 2024). Building on its strong business foundation and compelling number of customer touchpoints, SoftBank Corp. is expanding into non-telecom fields in line with its "Beyond Carrier" growth strategy while further growing its telecom business. Also, by fully harnessing the power of AI, 5G/6G, IoT, Digital Twin, Non-Terrestrial Network (NTN) solutions, including High Altitude Platform Station (HAPS)-based stratospheric telecommunications, and other advanced technologies, SoftBank Corp. aims to be "a company that provides next-generation social infrastructure essential to the development of a digital society." To learn more, please visit https://www.softbank.jp/en/

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SOURCE SK Telecom

What is the purpose of the joint venture announced by SK Telecom (SKM) and other companies?

The joint venture aims to develop Large Language Models (LLMs) specifically tailored to the needs of telecommunications companies to enhance customer interactions through digital assistants and chatbots.

Which companies are part of the Global Telco AI Alliance (GTAA) that announced the joint venture?

SK Telecom (SKM), Deutsche Telekom, e& Group, Singtel, and SoftBank Corp. are part of the Global Telco AI Alliance (GTAA) that announced the joint venture.

What languages will the Large Language Models (LLMs) be optimized for?

The LLMs will be optimized for languages including Korean, English, German, Arabic, and Japanese, with plans for additional languages to be agreed upon.

How many countries does the joint venture aim to reach with its innovative AI applications?

The joint venture aims to reach a global customer base of approximately 1.3 billion across 50 countries with its innovative AI applications.