Deutsche Telekom has formed a joint venture with South Korean telco SK Telecom to develop 5G-based in-building services.

They will each hold a 50 per cent stake of the venture and each will name one representative to lead the entity. The venture will be headquartered in Germany.

The two companies plan to develop 5G in-building services and develop market opportunities starting with Europe. In the mid-to-long-term, they will also evaluate opportunities to cooperate in the areas of augmented reality and virtual reality services, mobile edge computing (MEC) and the apps market.

According to Markets & Markets, the global market for in-building distributed antenna systems is expected to be worth US$10.3bn by 2023, growing at a CAGR of 10.1% between 2018 and 2023. Since there are not yet strong players dominating the market for 5G repeaters, the joint venture should be well positioned to pioneer the market.

SKT will contribute the technology assets it has developed over the years. The company has already provided 5G and LTE dual-mode repeaters to support Deutsche Telekom’s customer trial for in-building coverage carried out in eight different cities in Germany – Berlin, Hamburg, Bonn, Cologne, Munich, Darmstadt, Frankfurt and Leipzig – from August to October 2020.

Customer trial results have shown that users experienced significant improvement in 5G and LTE for both voice and data experience with this test device. The joint venture is scheduled to complete the development of a 5G-LTE dual-mode repeater.

“Together with SKT we are able to develop new and innovative products which enhance customer experience,” said Tim Höttges, CEO of Deutsche Telekom. “The first feedback from the repeater customer trial has shown the value of our partnership for us but, more importantly, for our customers. We will start with the repeater, but this joint venture is aiming at a much higher goal. That goal is to create major innovations for both companies fin the years to come.”

The creation of the JV is still subject to mandatory regulatory approval but expected to close before the end of the year.

“The partnership between SKT and Deutsche Telekom is very meaningful at a time when the world is heavily affected by the Covid-19 pandemic,” said Park Jung-ho, CEO of SK Telecom. “The deepened bond between the two companies will play an important role as a bridge between Asia and Europe and lead us to new technologies that can bring greater value to humanity.”

SK Telecom is a Korean ICT company driving innovations in the areas of mobile communications, media, security, commerce and mobility, using AI and 5G. In the Korean mobile market, it has more than 30 million subscribers, which account for nearly half of the market. The company now has 48 ICT subsidiaries and annual revenues approaching KRW17.7tn.