SK Telecom (NYSE:SKM) announced on May 26 its signing of an agreement with China Railway No.2 Engineering Group Co., Ltd (CREG, SHA:600528), the biggest construction company in China, for the establishment of a joint venture at Cheungdu, Sichuan, to set up and run a smart city system in China.
'Jinma Smart City' project, which will be managed by the joint venture, aims to realize a vision of intelligent urban space with cutting-edge city infrastructure which will be rolled out across a commercial/residential site located along the Jinma River in Cheungdu City, China. With the smart city system, dwellers and visitors of the complex are expected to enjoy a convenient urban life thanks to effective and eco-friendly urban management based on SK Telecom's superb ICT capability. In the long run, the project is anticipated to have a positive impact on the local economy, attracting more talent across the mainland with more income to the city's vault.
The joint venture will be founded in June with KRW 13 billion or RMB 77.5 million of capital stock and mutually owned by SK Telecom and CREG, each taking 60% and 40% of shareholding respectively. To lay the groundwork for the project, SK Telecom signed a comprehensive MOU with CREG in May 2008 and achieved an approval from its board of directors in December 2009. The Representative Director of the joint venture is to be selected by SK Telecom.
CREG plans to build an eco-friendly, sport-oriented commercial/residential complex along the Jinma River in a 26Km²of construction site by the year of 2020. SK Telecom, through the joint venture, will join the project from the second half of this year and plans to initiate the system roll out.
The joint venture will provide ICT consulting, solution and system supports, and handle the construction and management of facilities in the complex. As a project for setting up a smart city system in a commercial and residential complex, Jinma Smart City will present a new concept of city management with intelligent ICT and integrated system management tools.
Services that can be experienced at the Jinma Smart City complex are facility/energy control, security/patrol/anti-disaster services, parking lot management, community service, and cutting-edge advertisement media services with a long-term plan of introducing additional smart technology-based education, healthcare and transportation. Furthermore, to ensure a smooth operation of the system, an integrated city management center will be established to effectively perform comprehensive management of the urban space.
This project started to bear fruit when SK Telecom, noticing the potential of the Chinese market, proposed the deal to CREG. Since the inception of the business deal, both parties conducted a year-long project review and consultation and finally reached the agreement. SK Telecom views this joint venture as a test-bed for verifying SK Telecom's ICT capability and plans to continue its endeavor of exploring new business opportunities.
At the signing ceremony held at Cheungdu, Jin Woo So, President of SK Telecom's C&I CIC noted," All the eyes are now on how much synergy can be created from the Jinma Smart City - the sheer result of a union between Korea's No. 1 mobile carrier, SK Telecom and China's top urban developer, CREG. China has much room for enhancing industrial productivity as well as the level of business convenience, which can all be significantly boosted by SK Telecom's superb ICT power."
SOURCE: SK Telecom
