SKT, LG Uplus profits surge as AI data centers fuel growth

South Korean telecom operators SK telecom (SKT) and LG Uplus reported sharp increases in third-quarter operating profit on Wednesday, benefiting from lower one-time costs while expanding their artificial intelligence data center businesses as a new source of growth.

SK telecom said consolidated operating profit surged more than elevenfold to 552.3 billion won ($412 million) in the July-September quarter, up 1,040.3 from a year earlier. Revenue rose 13.1 percent to 4.49 trillion won.

The dramatic earnings rebound largely reflected a low comparison base. The company’s operating profit had plunged to 48.4 billion won in the third quarter of 2025 after it introduced customer compensation measures following a major hacking incident.

Its core telecommunications business also recovered, with standalone revenue rising 18.4 percent to 3.15 trillion won. Fixed-line revenue increased 7.4 percent, supported by growth in gigabit internet subscriptions.

LG Uplus reported an 84.1 percent jump in operating profit to 297.6 billion won, even as revenue slipped 0.7 percent to 3.98 trillion won. The profit improvement reflected the absence of one-time labor expenses incurred during last year’s workforce restructuring, along with broader cost-cutting measures.

The company generated 914.4 billion won in operating profit during the first nine months of 2026. It needs another 85.6 billion won in the fourth quarter to exceed 1 trillion won for the full year, a milestone it last achieved in 2022.

Beyond the favorable year-earlier comparisons, AI data centers emerged as a common growth driver for both operators.

SK telecom’s AI data center revenue rose 6.2 percent to 126.1 billion won in the third quarter, helped by higher facility utilization and increased submarine cable traffic.

The company has established SK Hyper and SK Horizon to separate data center development from operations as it scales up its AI infrastructure business. It plans to expand capacity in Ulsan and the greater Seoul area and is preparing to reassign headquarters personnel to related operations.

LG Uplus posted faster growth in the segment, with AI data center revenue climbing 27.7 percent to 131.7 billion won. Its broader enterprise infrastructure revenue increased 10.4 percent to 472.2 billion won, driven by demand for colocation services and data center design, construction and operation.

LG Uplus is developing a 200-megawatt AI data center complex in Paju, Gyeonggi Province, with four buildings scheduled to begin operations in phases through 2028. The company said it has already secured customer demand for all four buildings.

The first building, with a capacity of 50 megawatts, is scheduled to begin operating in June 2027. It will feature liquid-cooling infrastructure designed to accommodate advanced GPU servers, including systems powered by Nvidia’s next-generation Vera Rubin platform.

“With customer demand now confirmed for the fourth building as well as the second and third, we are moving ahead with the design and construction of the remaining facilities,” said Ahn Hyurng-gyoon, head of LG Uplus’ Enterprise AI Business Group, during an earnings conference call Wednesday.

He said the company would strengthen its competitiveness in AI data centers through investments aligned with customer demand while sustaining growth in its enterprise infrastructure business.

Rival KT Corp. is scheduled to report its quarterly earnings on Nov. 10.