SK Telecom (NYSE: SKM) said on August 27, 2026 that it will split its wholly owned subsidiary SK Broadband in two, moving the data center and submarine cable businesses into a newly established company called SK Horizon while the surviving SK Broadband keeps fixed-line, media and enterprise operations. The book-value split ratio is roughly 0.84 to the surviving company and 0.16 to the new one.
Alongside the spin-off, SKT signed a definitive agreement for a combined KRW 3.08 trillion equity investment in SK Horizon from funds managed by KKR and from the IMM Investment–Stonebridge consortium. Once all phases of the investment close, KKR will hold 29% and the IMM consortium 20%, with SKT retaining management control at 51%. SK Horizon will carry eight operating data centers plus new AI data centers under construction in Ulsan and Guro, targeting 318 MW of total capacity. The company is due to be established in the first quarter of 2027, subject to an extraordinary general meeting of shareholders and government approvals.
Executive Summary
What SK Telecom announced is, on paper, a corporate reorganization. In practice it is a financing structure. Building AI data centers — facilities purpose-built to host the dense, power-hungry servers that train and run AI models — has become a capital problem that does not sit comfortably inside a telecom operator’s profit-and-loss statement. Carriers are valued on stable cash flows and dividends; multi-year, multi-billion-dollar construction programs with uncertain lease-up are valued on entirely different terms. SKT’s answer is to put the assets in a separate vehicle where infrastructure investors can fund them directly.
The capital comes from two very different pockets. KKR is one of the largest infrastructure investors globally, with over USD 100 billion in infrastructure assets under management and more than USD 70 billion deployed across digital and power assets; it is investing primarily from its Asia Pacific infrastructure strategy. The IMM Investment–Stonebridge consortium brings domestic Korean institutional capital — IMM manages over USD 7.5 billion, and Stonebridge has roughly KRW 3.6 trillion (USD 2.5 billion) in cumulative AUM. IMM’s infrastructure head framed the deal explicitly around “digital sovereignty,” pairing global capital with domestic ownership.
The structure matters as much as the money. SKT keeps 51% and management control, so SK Horizon remains consolidated and strategically directed, while 49% of the equity risk and funding burden is shared with outside investors. That is the template infrastructure investors have used for towers, fiber and power assets for a decade, now applied to AI compute capacity. If it works in Korea, other carriers sitting on data center estates will read it as a playbook.
Why the Carrier Balance Sheet Ran Out of Room
A telecom operator’s financial profile is built for predictability. Investors buy carriers for recurring subscription revenue and dividends, and they penalize capital intensity that does not convert quickly into cash. AI data center construction inverts that: heavy upfront spending on land, power connections, cooling and shell, with revenue arriving only after tenants sign and equipment lands. SKT’s own release makes the motive plain — the restructuring is meant to “enable focused investment” and let the unit “more effectively secure funding for key business areas, including through external investment.”
Separating the assets solves several problems at once. A standalone infrastructure company can raise equity from investors who underwrite long-duration assets on infrastructure return expectations rather than telecom multiples. It can also borrow against contracted capacity in ways a diversified carrier subsidiary cannot as cleanly. And it gives the parent a clean line between the businesses it wants valued for growth and the businesses it wants valued for stability — the surviving SK Broadband is explicitly pointed at fixed-line, media and enterprise.
The trade-off is dilution of economics. SKT is giving up 49% of the upside in what it calls Korea’s leading AI data center platform in exchange for capital and speed. Whether that is a good trade depends entirely on numbers the release does not provide: the valuation implied by KRW 3.08 trillion for a 49% stake, and how much of the buildout that money actually funds.
Three Companies, One Buildout — and a Gap Worth Noticing
SKT has now described a three-tier structure. SKT itself sets strategy and handles relationships with global big tech customers. SK Horizon operates and expands the existing estate — eight live data centers in Seocho, Ilsan (two sites), Bundang, Gasan, Centum, Yangju and Pangyo, plus new AI data centers under construction in Ulsan and Guro, working toward 318 MW of total capacity. SK Hyper, established in July 2026, handles business development for new gigawatt-scale projects, with 5 GW targeted for phased opening in 2029 and expansion toward 15 GW by 2035.
The gap between those figures is the single most important thing in the announcement, and it deserves plain language. Capacity in this industry is measured in megawatts of IT power, because power — not floor space — is the binding constraint. SK Horizon’s 318 MW target is roughly 0.3 GW. SK Hyper’s stated ambition is 15 GW, or about forty-seven times larger. The KRW 3.08 trillion announced here is an investment in SK Horizon, the operating platform, not in the 15 GW program.
That does not make the announcement small — a 318 MW portfolio with live, revenue-generating assets is a genuine platform, and having outside capital validate it is meaningful. But readers should not conflate the two. This deal funds the near-term expansion of an established estate. The gigawatt-scale ambition remains, on the evidence in this release, unfunded and undisclosed as to financing. Reading the announcement as “KKR is funding SKT’s 15 GW plan” would be wrong.
What Infrastructure Capital Is Actually Underwriting
KKR’s partner on the deal points to three things: an established operating platform, capacity under development, and a strong strategic partner. That is a fair summary of what makes a minority infrastructure position financeable. Operating assets generate cash from day one. Development pipeline provides growth without a greenfield land grab. And a 51% parent with customer relationships to global cloud and AI buyers reduces the risk that the platform is built and not filled.
The minority-with-control structure is deliberate on both sides. SKT avoids deconsolidation and keeps strategic direction. Investors get exposure without operating responsibility, and typically negotiate governance protections and exit mechanisms — neither of which the release describes. The presence of domestic Korean institutional capital alongside a global firm is also not incidental: critical national infrastructure carrying international submarine cable landings tends to attract regulatory attention, and a domestically anchored ownership structure is easier to approve.
For enterprise buyers, the practical read is mixed. A separately capitalized operator with committed equity behind it is generally a more reliable landlord than a subsidiary competing internally for capital. But private-equity-backed infrastructure also runs on return targets and eventual exits, which over a multi-year contract horizon can influence pricing discipline and reinvestment. Buyers signing long leases should ask about the investment’s phasing and about investor rights, not just the headline number.
Submarine Cables and the Sovereignty Argument
The less-discussed half of the carve-out is submarine cable infrastructure, which SK Horizon will expand in phases. Subsea cables are the fiber-optic lines on the ocean floor that carry essentially all intercontinental internet traffic. For AI specifically, they matter because training data, model weights and inference traffic move between regions, and because a data center campus is only as useful as the international capacity connecting it.
Bundling cables with data centers in a single vehicle is a coherent strategy: it lets one company sell capacity and connectivity together, and it is a structure that has proven attractive to infrastructure investors elsewhere because both asset classes share long lives and contracted revenue. IMM framed both as “core infrastructure assets shaping Korea’s digital sovereignty and industrial competitiveness” — a positioning argument that is currently more assertion than demonstrated outcome, but one that aligns with how several governments now treat compute and connectivity.
The competitive context is worth stating without overstating it. Korea has real advantages for AI infrastructure — dense fiber, an advanced digital economy, and domestic semiconductor and manufacturing demand. It also faces the same constraint every market faces: power availability and grid interconnection timelines. The release does not address power procurement at all, which is the question that determines whether any of these capacity targets are achievable on schedule.
Background
SK Telecom has operated in telecommunications since 1984 and is listed in the United States on the NYSE under the ticker SKM. In recent years it has repositioned around what it describes as a full-stack AI ecosystem spanning infrastructure, models and services. SK Broadband, its wholly owned subsidiary, has been the group’s fixed-line, media and data center arm, and the eight facilities now moving to SK Horizon make it one of Korea’s larger data center operators.
This announcement is the third step in a sequence rather than a standalone move. SKT previously said it would pursue an AI data center buildout of up to 15 GW with the aim of becoming an Asian AI infrastructure hub, and signed a memorandum of understanding with Supermicro and Schneider Electric covering total solutions for AI data center deployment. It established SK Hyper in July 2026 to develop new gigawatt-scale projects. With SK Horizon, the group now has a defined three-part structure: SKT setting strategy and handling global big tech relationships, SK Horizon operating and expanding the existing estate, and SK Hyper developing the next generation of sites.
Source: SK Telecom Launches AI Data Center Infrastructure Company ‘SK Horizon’ and Secures Investments from KKR and IMM — SK Telecom’s August 27, 2026 announcement of the SK Broadband spin-off and the KRW 3.08 trillion equity investment from KKR and the IMM Investment-Stonebridge consortium.
