March 19, 2002

Seyong RoVice President,

New Service Development Division

Wireless Internet,Today & Tomorrow

2/18

Table of Content

1. Korean Market

2. Our Strategy - Openness - Multimedia

Platform 3. m-Commerce

Initiatives

3/18

Source: OECD (March ’00)

Internet & Wireless Penetration (%)

0

5

10

15

20

25

0 10 20 30 40 50 60 70

Wireless

Inte

rnet

Japan

Korea

United States

Sweden

Finland

Austrailia

Austria

Belgium

Canada

Czech Republic

Denmark

France

Germany

GreeceHungary

Iceland

IrelandItaly

Mexico

Netherland

New Zealand

Norway

Portugal

Spain

United Kingdom

1. Korean MarketLight speed growth both in internet & wireless

4/18

1) Portion of non-voice revenue among total wireless revenue(1H ‘01)

2) Includes i-SMS access

# of wireless subscribers

(000)

# of wirelessweb access

(000)

% of wireless data revenue 1)

Japan 67,537 49,438 (73.2%)

16% (DoCoMo)

Korea 29,235 24,284 (83.1%) 2)

11% (LGT)

In wireless, Korea soon to become more than an “another i-mode” miracle

(As of Jan ‘02)

Comparison with Japan

5/18

357

P2P SMS

Others

2000 2001

Wireless DataRevenue # of WAP Phones

WAP PhonePenetration

ActiveUsers*(40%)

(100 Million Won) (% to total subs.)

Striving to excel in wireless data

WirelessInternet

432

74

511

221

257

62% ↑172

650

68% ↑

54%

197% ↑

LGT Wireless Data Performance

48

100%

1,300

68%

1,900

2000 2001 2000 2001

3,190

◀

(Thousand)

* Subscribers who access to wireless internet at least once per month

6/18

Reason for NOT using (%)

No need20%

Difficult to use3%

Not aware13%

No handset29%

Expensive30%

Nothing attractive

3%

Reason for STOP using (%)

Expensive49%No need

14%

Slow17%

Others

1%

Nothingattractive

5%Unstable

connection11%

No fun3%

However, current wireless internet services are not enough to satisfymass customers.

Source: Yonsei University Research (Aug. ’01)

7/18

Even for early adopters, most of the wireless internet services are not yet positioned as killer services in everyday life.

Event of Use (%)

Revenue by Contents(%, Jan. ‘02)

12%

1%

1%

2%

3%

4%

5%

6%

27%

39%

Others

Other Info. needed

Stock Info. needed

In vehicle

Lunch time

Sleepless

Frequently

Urgent e-mail

During break

When nothing else to do Others

Stocks/Banking

Chatting/Community

Entertainment

Ring tones& Character D/L

Mail & Messaging

39

13

11

7

5

6LBS/Traffic

Games13

6

Source: Yonsei University Research (Aug. ’01), LGT Analysis

8/18

EVDV

So far, so good,•Explosive wireless growth•Dot-com fever•Aggressive marketing by carriers

But how long will it last ?

Time

What does it take to cross the chasm ?

Wireless Internet

IS95A/B 1X, EVDO

9/18

2. Our Strategy

MultimediaPlatform

Openness&

Standard

• Enhanced Wireless Internet Platform• Handset-independent Client Software• Java based

• Direct path to any URL• Open Portal / Menu• Open Access (IWF*)• Support Personal / Unofficial Sites

- No longer a “Walled Garden”, but “Traffic Maximization”- Focus on Multimedia Platform

* IWF (Inter Working Function)

10/18

LGTSubs.

LGT-NW

LGT-GW

YahooDaum

LGTSubs.

LGT-NW

LGT-GW

ez-i

Contents Provider

Open Access

Open Portal

• Allow access to LGT IWF • Competition between G/W owners

• Allow access to LGT G/W• Competition between Portal owners

ez-iYahoo

LGTSubs.

LGT-NW

LGT-GW

EXAMPLE

DACO

M-G

W

Megapass

Yahoo

Daum

Daum

Chollian

Walled GardenChollian

KT-

GW

Our Strategy – Breaking the walls

ez-i

- Open portal already in place (Daum, Chollian, Yahoo, etc)- Open access tested with Dacom. Soon to be opened to MISPs and commercialized (Q1 ’02)

11/18

Multimedia will be a next big thing along with evolution of wireless network

Our Strategy –Enhanced Multimedia Platform

Mobile Multimedia Potential

Customer Needs A little bit of Proof

• Graphic/Multimedia UI

• Video On Demand

• Audio On Demand

• Multimedia Messaging

• Mobile TV …

95 A/B CDMA 2000-1X

230%

(Wireless Internet ARPU*, Index)

100

330

* Jan. ’02 result

12/18

ContentProvider

•Ease of contents sourcing •Ease of handset supply•Increase in wireless data usage

Carrier

User

•Open environment - Ease of development - Less resource required - Time to market

•Fun @ low-cost•Variety of attractive contents•Improved user interface (GUI)

Java is a possible win-win solution for users & industry participants

13/18

Q3 Q4

2001 2002

Q1 Q2 3Q Q4

2000

Q2Q1Q4

Kitty-hawk

MIDP

EnhancedWI Platform

(JINOSTM)Platform

Java WAP browserBrowser UP WAP browser

LGT Wireless Internet Platform Roadmap

14/18

Java VM

Advanced Architecture

•A platform fully integrated into user handsets•Passed TCK* test & supports International Standard (J2ME CLDC MIDP)•Developed by LG Telecom & Veloxsoft

Phone HW

WAPSMS PIMSOther

…Apps

MainUI

Phone HW

Phone OS

JavaVM

WAP

JavaApplets

SMS PIMSOther

…Apps

MainUI

Phone OS

• Java-based SW environment• Full integration of Java into handset• Dynamic upgrade capability

LGT’s New Platform Architecture

Traditional Architecture

• Java as one of the native applications• Limited access to phone features• Most applications remain difficult to

port * TCK (Technology Compatibility Kit)

15/18

- Optimized run-time environment for any java applications/contents- Nearly everything is DOWNLOADABLE !!! (skin, browser, MMS player, game, any operators’ standard UI, PIMS, etc…)

MIDP

KVM & CLDC

H/W Specific Device Drivers

Hardware

OS, Protocols, Standards, …

LGT Profile

Common H/WDevice Drivers

Mobile SUITS Profile Native Application/API

Mobile SUITSDevice Driver Standard

Java Application

Java RuntimeEnvironment

NativeSoftware Layer

Device DriverLayer

MainUI

WAPBrowser

Games PIMS

Handset Manufacturer

End-User

LGT&

ThirdParty

Contents Provider

OTADownload

OTADownload

OTA* Download

Why New Platform ?

* OTA (Over The Air)

16/18

Java Contents - Examples

OK UP

<JAVA Station>1. Game 2. Comics3. Novels4. E-Mail/News5. Maps6. Instant Messenger7. Notice

Friendly UI* & Greater fun

* UI (User Interface)

17/18

Java Economics

User

Improved economics for users & carrier

Source: LGT simulation

38%KRW 53

JavaMail

WAPMail

KRW 33

LG TeleCom

83%KRW 89

JavaMail

KRW 15WAPMail

- Affordable Price (Game example) . Standalone Daily Use $0.2 ~ 0.4

Monthly $1.5 ~ 2.3Ownership $2.3 ~ 3.8

. Network(MUG) Monthly $0.8 ~ 2.3

- Improved Economics (Mail example) . Reading a mail (300 characters)

. Writing/Sending a mail (20 characters)

76%

Average Wireless

internet UserActive Java

User

$2.9

$5.1

Higher Data ARPU

18/18

mFinance

mPayment

News e-mail Game LBS Downloads ….

RF Proximity Payment

(ez Pass) On-Line Payment Vending Machine M Plus Card P/G1

IrDA Payment One-Chip (UIM) e-Cash Integrated billing Credit Card

EBPP2

…

1: Payment Gateway2: Electronic Bill Presentment and Payment3: Person to Person

mMarketplace

Stock Banking P2P3

PFMS Asset Managmt …

Ticketing Shopping Auction Price Comparison Advertisement Coupon ……

Currently running

To be launched in Q1’ 02

mInfortainment

3. m-Commerce Initiatives•Infotainment and Marketplace seen as in traditional portal business. •New business development focuses on “Mobile Payment” area.

19/18

2000 ~ 20012002

1H 2H2003~

PaymentService

PaymentInfra

CAT(Partnership)

Contact

Utilizing current handsets (offline/online/mobile)

OtherInfra

WPKI

(Dacom Partnership)

Khai Membership Coupon Business

AuthenticationSystem

Barcode server

UIM

m wallet (server)

Combi (Contact + contactless)

• Traffic Card• On-Line Payment• M Plus Card• Vending Machine

IrDA Phone Offline oriented, online/mobile capable

Mobile ad media rep.Ad server

2002 m-Payment Roadmap

M-P/G System

www.lgtel.co.kr

Thank you