SK Telecom (NYSE:SKM) and Deutsche Telekom AG today announced that they have signed a cross investment agreement yesterday to further strengthen their competitiveness in 5G and deepen their cooperation in the global market.

The agreement signing ceremony took place on October 22, 2018, at SK Telecom’s Seoul headquarters with the participation of Park Jung-ho, President and CEO of SK Telecom, and Timotheus Höttges, CEO of Deutsche Telekom.

The CEOs of the two companies also held a town hall meeting on the same day with the participation of SK Telecom employees to discuss the current issues in the ICT industry and share their insights on digital transformation, business strategy and corporate culture innovation.

Under the agreement, SK Telecom plans to invest in MobiledgeX*, a subsidiary of Deutsche Telekom, and Deutsche Telekom plans to invest the same amount in ID Quantique (IDQ)**, SK Telecom’s strategic partner in quantum cryptography communication technology.

* MobiledgeX is an edge computing company founded by Deutsche Telekom AG and headquartered in Menlo Park, California, focused on delivering developer-facing edge computing services.

** ID Quantique, based in Switzerland, is the global leader in the field of quantum cryptography communication. SK Telecom has become the major shareholder of IDQ by acquiring more than 50% of IDQ’s shares in February 2018.

SK Telecom and Deutsche Telekom have made their cross-investment decision to gain leadership in the upcoming era of 5G by offering specialized 5G services with ultra-low latency, while addressing potential security threats against financial institutions and public agencies.

Unlike the pre-5G era, which was mainly about communication between people, the 5G era will be marked by communication between people and things, as well as communication between things, which will support intelligent services like connected car, smart factory and wearable devices.

Against this backdrop, the two companies have decided to share their technologies and knowhow to gain leadership in the global 5G market.

Deutsche Telekom is considering the adoption of quantum cryptography communication system. SK Telecom and Deutsche Telekom are currently in the process of qualifying IDQ’s quantum cryptography technologies on their respective trial networks.

With the use of quantum cryptography, the security of national infrastructure, financial networks, data centers and medical institutions will be significantly enhanced. Going forward, quantum cryptography will be applied to more areas.

Moreover, SK Telecom and Deutsche Telekom are reviewing the idea of utilizing mobile edge computing technologies to reduce data transfer time. For instance, with mobile edge computing, companies can conduct on-site monitoring of disaster-affected areas and respond faster to traffic accidents.

The two companies will also strengthen their cooperation in diverse new business areas including AR and VR. They will exchange their knowhow and expertise in realistic media technologies and support SK Telecom’s efforts to launch its media solutions in the European market.

Furthermore, SK Telecom and Deutsche Telekom will seek diverse investment opportunities to expand the global ICT ecosystem by providing joint support to promising startups of Korea and Europe to help them advance into overseas markets.

“SK Telecom is pleased to enter into a cross-investment agreement with Deutsche Telekom as it will serve as a valuable opportunity for us to further solidify our 5G leadership in the global market and drive new growth,” said Park Jung-ho, President and CEO of SK Telecom.

“We look forward to intensifying our successful cooperation with SK Telecom. The partnership will help both companies to strengthen our global technology leadership and bring 5G and other innovative services to our customers,” stated Timotheus Höttges, CEO of Deutsche Telekom.