UBS has initiated coverage of South Korea's telecom sector with a positive outlook, highlighting strong earnings growth and expansion into AI, data centers, and cloud services. The sector is seen as undervalued, trading at a significant discount compared to Japanese counterparts, with a projected 10% annual growth in operating profit from 2024-2026. UBS favors KT for its robust growth in data centers and cloud services, while SK Telecom is also rated positively for steady profit expansion; LG Uplus is rated Neutral due to weaker returns and less clarity in its AI initiatives.