WiBro Deployment &3G Evolution in Korea

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KT OverviewKT OverviewKT OverviewKT Overview

1981 Established KT Corporation

1993 # of Telephone lines reached 20 M

1999 Opening of local telephony market

2002 Privatization completed

Population: 47.8 M Household: 15.3 M

As of December 2004

# of Employees Revenue (2004)

Telephone Subscribers

Broadband Subscribers

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Service ProviderManufacturer

Customer Government

Saturation of market • Telecommunication• Fixed broadband

Prosperity of IT Industry Adoption of BcN Breaking economic depressionDemand for New

Business Model

WiBro/Mobile WiMAX

Mobile Internet service High-speed multimedia

Mobile Internet High-speed multimedia Telematics/RFID Various added services

Creating new service market Developing domestic & abroad market Early ubiquitous model

Demand for WiBro/Mobile WiMAX Service Demand for WiBro/Mobile WiMAX Service

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Korea Broadband MarketKorea Broadband Market

Bandwidth1000 TimesBandwidth1000 Times

50M56K

‘95 ‘04

InternetUser

103 Times

InternetUser

103 Times 31M0.3M

‘95 ‘04

‘95 ‘04

PC

5 TimesPC

5 Times26.2M5.4M

2M

4M

6M

8M

10M

12M

Dec. 2001 Dec. 2002 Dec. 2003 May 2005

Wireline Broadband Total

ADSL/VDSL

Cable

Subscriber StatusSubscriber Status

LAN

6.7M

4.2M

1.2M

12M

Mobile1xEV-DO 11M

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More Needs for Wireless Data More Needs for Wireless Data

Wireless data market in Korea is tremendously increasing at CAGR of 20.20%.The other markets are decreasing or getting saturated.

Telecom Market Forecast in Korea (KISDI, 2004)

0

2

4

6

8

10

12

14

2004 2008

Revenue (

10

0 M

illio

n U

SD

)

CAGR = 4.77%

CAGR = 20.2%

CAGR = -3.08%

CAGR = - 6.23%

Fixed

Voice

Fixed

Data

Mob

ile V

oice

Mob

ile D

ata

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Revenue Share for Fixed Service

Revenue Share for Wireless Service

0%

20%

40%

60%

80%

100%

LM/MM

Voice

Mobile Internet

(source: SKT 2004 Annual Report)(source: KT 2004 Annual Report)

0%

20%

40%

60%

80%

100%

Mobile Resale

LM

Voice

Broadband

Growth in Wireless Data Market Growth in Wireless Data Market

Data service revenue is 35 % of fixed and 23 % of mobile revenue.

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Userterminals

Carry the high speed Internet in your pocket any-time, any-where, any-device ! WiBro is a data-optimized broadband wireless service complementary to cellular and/or WiFi.

What is WiBro/Mobile WiMAX? What is WiBro/Mobile WiMAX?

University

Subway

Car Airport

WiBro

On the street

Building

Full mobility

High data rate

Low access cost

More than 100 km/h

1Mbps per user Even higher data rates

will be available later

Basic rate + extra rate Lower rate than

existing mobile internet

Laptop Handheld PCPDA Smart phone

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Positioning of WiBro/Mobile WiMAX Positioning of WiBro/Mobile WiMAX

Distinguished from the existing services by mobility, higher-speed data transmission, and competitive price. WiBro, 3G, and WLAN complement each other and are partially competing.

Cost effectiveness

Mobility

Terminal portability

Data rate

WiBro

3G (W-CDMA, HSDPA)

CharacteristicsCharacteristics

Data centric

Voice centric

Data Rate

2G(IS-95,

Cellular)

Mobility

Wired phone

Cordless phone WLAN

High speed Internet (xDSL)

3G(W-CDMA)

PositioningPositioning

“WiBro, Mobile WiMAX”

Superior incoverage & mobility

Superior in

data rate & access cost

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Evolution Path Internet: IEEE802.3(LAN) IEEE802.11(WLAN) IEEE802.16(WiBro) Cellular: 1G(Analog) 2G(Digital) 3G(IMT-2000) 3.5G(HSDPA)

Evolution Path Evolution Path

2G/2.5G

4G 4G Convergence Convergence

NetworkNetwork3G3.5G

WirelessLocal Loop

AMPSGSM /

cdmaOne

WCDMA /cdma-2000

HSDPA /EV-DV

WLL

IEEE 802.3

IEEE 802.11

IEEE 802.16e

WiBroWiBro

2000 2005 2010

WiFi

LAN

Cel

lula

rIn

tern

et Nespot

Megapass

FTTC

FTTH

ADSL/VDSL

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• source: Maravedis (2004) • source: Korea Information Strategy Development Institute (2004)

Market Estimation Market Estimation

Wireless broadband market will keep growing Domestic: In 2011, about 9 million users (KISDI) Overseas: In 2008, mobile BB market will be 40% of BB market (Maravedis)

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Creating a strong value-chain with an open all-IP transport architecture. Creating synergy with the conventional services (Win-Win)

Aside from the individual users, create business models for enterprises and public sectors. Networking of the individual, enterprise, and public sector will create synergy.

CP Carrier/Portal

User

Enabler

Carrier

Wired PortalWeb site

UserCP

Fixed/wireless

Convergence

+

Open network

MarketBarrier

Current mobile Internet service architectureCurrent mobile Internet service architecture

Future high-speed mobile Internet service architectureFuture high-speed mobile Internet service architecture

Business Model Strategy Business Model Strategy

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Development of multimedia and convergence application using existing infra Creation of brand new customer experience

Application of core technology of KT’s existing infra Fixed (demand mobility) + Wireless (demand broadband) Combined Service

Existing fixed/wireless contents + various internet services Multimedia, 3D, upgrade by solution-combined production

Business Models Business Models

MMS (Multimedia Messaging Service) High Quality Image Mail/Messaging

Push-type Service Group Image Chatting, Ad & Coupon

Game : IP based Network Game LBS (Location Based Service)

Applied Services based on LBS IP Multicasting Service

High Definition VOD, Real Time Play, Movie Short message service (SMS)

Entertainment (VOD, Simple game)

m-Commerce (e-Banking)

Wi-Fi Package Service

CDMA Package Service

DMB Package Service

Wireless

Service

Multimedia

Convergence

Fixed-Wireless Link

Co

re Service

Packag

e S

ervice

Information (Web surfing, e-Mail, etc.)

Entertainment (Movie, VOD, etc.)

Others: e-Stock, e-Banking, e-Learning

Evolution

Existing Internet ServiceExisting Internet Service WiBro Killer ApplicationsWiBro Killer Applications

Fixed

Service

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Network Architecture Network Architecture

Transfer NetworkTransfer Network Internet Back BoneInternet Back Bone Server FarmServer FarmAccess NetworkAccess Network

switch

WiBro Zone

AAA(Diameter)

HA

MetroEthernet

RAS

Internet Node Server Farm

ACRKT BcN

Operate Management System(Backend)

Application Service Server(Core)

Repeater

WiBro Network Architecture

WiBro Network? KT’s state-of-art premium back bone and optical access network Lower cost and more efficient network

※ RAS: Radio Access Station, ACR: Access Control Router, AAA:Authentication, Authorization and Accounting

BcN: Broadband Convergence Network, HA: Home Agent

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- Stage1 : Seoul, metro cities- Stage2 : Metro, major cities- Stage3 : Minor cities

- 2G/3G: Voice-oriented, nation-wide, narrow-band- WiBro: Urban cities- WiFi: Hot-Spot

Network DeploymentNetwork Deployment Network IntegrationNetwork Integration

KT’s commercial WiBro service in Seoul in April 2006 Network integration with KT’s existing infra

Network Deployment & Integration Strategy Network Deployment & Integration Strategy

Daejeon

Seoul

Incheon

Gwangju

Ulsan

Busan

Daegu

Stage1Stage2Stage3

WiBro/Mobile WiMAX

2G/3G Network

WiFi

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Early stage Growing stage Matured stage

WiBro onlyPCMCIAPCMCIAEmbeded modemEmbeded modemPDAPDA

WiBro + WiFI WiBro + CDMA WiBro + DMB

DBDM

TBTM WiBro + WiFI + DMB WiBro + WiFi + CDMA WiBro + CDMA + DMB

Personal/businessPersonal/business Convergence Convergence Application specificApplication specific

Customized one chip

Terminal Roadmap Terminal Roadmap

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Mar2005

Nov2005

2006 2007 2008

- Phase II

Large & Medium Cities

- Phase III

Medium & Small Cities

KT’s Licensed Spectr

um

KT’s Licensed Spectr

um

- Phase I

Initial Commercial Service

(Seoul Metropolitan Area)

Aug2005

Commercial ServiceCommercial ServiceSite

Construction

Site Construction

APEC DemoAPEC Demo

KT’s WiBro subscribers 3.1 Million

KT WiBro revenue 1.2 Billion USD

Cumulative Capex 1 Billion USD

2010’s Key Target Figure

Service Rollout Plan Service Rollout Plan

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APEC Demonstration APEC Demonstration

First mover to hold WiBro demonstration

Date: Nov. 12 ~ 20, 2005 Place: Busan, Korea Guest: Presidents and VIP of each nation,

Major company’s CEO, The Press Demo Area: Bexco, DongBaek island,

resort areas

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WiFi

IEEE802.16d/e Air Interface standard

Expanded WiMAX WiFiLiaison

InterworkingWiBro

Fixed Mobile

WiBro B3G Solution in Korea and Worldwide− WiBro B3G Solution in Korea and Worldwide−

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Relaxed regulation Relaxed regulation

Extensive network & terminal expertiseExtensive network & terminal expertise

Manufacturing & operatingManufacturing & operating

Vision for WiBro/Mobile WiMAX Vision for WiBro/Mobile WiMAX

Mutual cooperative partnershipMutual cooperative partnership

WiBro WiMAX

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Broadband Life Partner

Sung Ho YoonKT London Officeshoyoon@kt.co.kr