South Korea’s No.1 mobile carrier SK Telecom has decided to directly secure optical transceivers beginning this year in an effort to cut costs, according to industry sources on April 21. Until now, suppliers, such as Kosdaq-listed Lightron, had provided SK Telecom with the transceivers, along with other telecom equipment.
In 2019, Lightron posted sales of KRW 112.8 billion, which was nearly three times that of 2018. It also swung to the black of up to KRW 26.1 billion.
SK Telecom also plans to diversify its optical transceiver supply line to OE Solutions, another local supplier. OE Solutions have also supplied KT and LG Uplus. In 2019, the company logged sales of KRW 210.2 billion, and an operating profit of KRW 58.3 billion.
Optical transceivers is a necessary component for nearly all wired, wireless telecom equipment, and it can also be supplied separately from other equipment.
“Equipment manufacturers usually raise the margin by supplying optical transceivers, meaning that mobile carriers can seek to cut out that cost by procuring the transceivers themselves,” said one market expert close to the matter. He added that once SK Telecom begins on this path, other telcos may follow suit.
The Elec is South Korea’s No.1 tech news platform.