September, 2009

SK Telecom’s Green ICT BusinessSK Telecom’s Green ICT Business

Myung Sung Lee, Ph.DMyung Sung Lee, Ph.DCTO & Executive Vice PresidentCTO & Executive Vice President

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Contents

I. SK Telecom Overview

II. Background & Strategy

III. Key Tasks

IV. Future Plans

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I. SK Telecom Overview

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1996 CDMA

2007TD-SCDMATest-bed

CDMA2000 1x

EVDO

HSDPA2006

1997

1998

1999

2000

2001

2002

2003

2004

2005

World’s Most Innovative CompaniesWorld’s Most Innovative Companies

Ranked 91Ranked 91stst - One of two Telco companies selected- One of two Telco companies selected

(April 2005)(April 2005)

Winner of “National Customer Winner of “National Customer

Satisfaction IndexSatisfaction Index””-1st Place for 12 consecutive years1st Place for 12 consecutive years

(April 2009)(April 2009)

““Best Employers in Asia”Best Employers in Asia”- Awarded for Awarded for

creative corporate culturecreative corporate culture

(Hewitt Associates & WSJ Asia,(Hewitt Associates & WSJ Asia,

April 2007)April 2007)

““Best Asia Telecom Carrier”Best Asia Telecom Carrier”- Awarded two consecutive years- Awarded two consecutive years

(Telecom Asia & IDC,(Telecom Asia & IDC,

April 2007)April 2007)2008 HSUPA

Various World Firsts of Various World Firsts of

Technology & Service Development Technology & Service Development

Marketing Leadership Marketing Leadership

Red Devils(World Cup

Ambush Marketing)

Red Devils(World Cup

Ambush Marketing)

SK Telecom’s growth mirrors the development of mobile telecommunication in Korea.Since launching the world’s first commercial CDMA service, SK Telecom has contributedto advancing the ICT industry by promoting production and creating added value and jobs.

4 1) GHG : Green House Gas 2) GSMA: GSM Association 3) Environmental Business International

Increased demand for eco-data from investors

Increased eco-biz

opportunities

Stricter regulations/monitoring

II. Background & Strategy 1. Background

A company-wide organization and strategy in regards to environmental management is necessary in view of global trends and growing demand from governments/NGOs and investors. SK Telecom

Issues Increasing interest in eco-consumption

- 2009 global consumption keywords : Economical, Essential, Environmental (KOTRA, 2009 Consumption Trends)

Active adoption of eco-mark to support

green consumption

- Homeplus adopted carbon labeling for

PB products (Jan.2009)

Increased demand for eco-mgt/sustainable mgt-related info

Start of Carbon Disclosure Project in 2003 which requires companies to reveal their plans to counter climate change

- In 2008, 385 financial firms asked for info from 3,000 firms, and 1,550 responded

Increasing investment in new regenerative

energy, eco-technologies - World environmental market is expected

to reach USD 768.7 billion in 20103)

Announcement of 5-point strategy for development of IT Korea (Sept. 2, 2009)

- To invest KRW189 trillion by 2013

Industry showing visible response to climate

change - Pursuit of Green IT development projects

Korea is likely to be mandated to reduce GHG emissions from 2nd commitment period(from 2013)

Gov’t reveals GHG1) mitigation scenarios (proposal) (Aug. 3, 2009)

GSMA2) is expected to release report containing position of mobile industry operators regarding climate change (before December 2009)

Increase in green

consumers

Curb GHG emission - GHG emission is on the rise due to increased investment in 3G network

Boost efficiency - Reduce costs and generate profits via environmental management

Launch new business - Explore new business by developing green IT Raise customer

awareness - Enhance corporate image and brand value via environmental management

Curb GHG emission - GHG emission is on the rise due to increased investment in 3G network

Boost efficiency - Reduce costs and generate profits via environmental management

Launch new business - Explore new business by developing green IT Raise customer

awareness - Enhance corporate image and brand value via environmental management

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• Promote customers’ eco-friendly lifestyle

- Develop new businesses like Smart Grid, u-City

- Navigation system that reflects real-time traffic

- Expand use of e-billing - Promote collection/reuse of old mobile phones/batteries - Develop environmental services

2. Strategy

Use Green ICT to promote customers’ eco-friendly lifestyle. Increase eco-operations and purchases, and communicate related efforts to customers to enhance SK Telecom’s eco-image.

Lead

eco-mgt. through

ICT

• Greenify operations - Expand use of video conferences

- Replace LED lights: stores, office, switchboard room

- Expand operation of eco-friendly vehicles

- Introduce wind/solar power facilities

• Greenify supply chain by establishing green purchase

standards - Continue to unearth and use eco product items

- Protect customers and environment via compliance to regulations limiting hazardous substances in mobile phones

- Standardize and make universal mobile phone peripherals

• Communicate eco-activities to customers

- Energy saving campaign - Boost environmental volunteering (induce customer participation) - Improve exterior look of base stations - Support studies into effect of

electromagnetic radiation

II. Background & Strategy

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Chairman (GMS President)

Chairman (GMS President)

Green ProcessGreen Process Green ProductGreen ProductGreen CultureGreen Culture

SK Telecom Green ICT Committee

3. Areas and Organization

3 Key Areas

Green Culture Green Process Green Product

Board of DirectorsBoard of Directors

MNO CICMNO CIC C&I CICC&I CIC GMS CICGMS CIC

Corporate Citizenship Committee

Corporate Citizenship Committee

II. Background & Strategy

Draw up company-wide environmental management strategy

Set up environmental management system

Environmental management training and social contribution

Internal/external communication

Respond to climate change Draw up environmental

network strategy Secure green IT technology Draw up environmental

marketing strategy Draw up green purchasing

strategy

Greenify existing products and services

Uncover new business

SK Telecom aligned its ICT strategy to the 3 areas of Culture, Process and Product set by the SK Group’s Environmental Management Committee and set up the Green ICT Committee.

※ Created CSR Team which is dedicated to environmental management (Jan, 2009)

CEOCEO

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Green ICT

Green NetworkGreen Network

Green MarketingGreen Marketing Green OfficeGreen Office

III. Key Tasks 1. Summary

Eco-friendly wireless sites-17,000(2007)→30,000(2008)

Adopt natural A/C units-Cut electricity use by more

than 50%

[GHG reduction(tCO2)]

3,475 3,011

6,9379,506

2005 2006 2007 2008

Manage electromagneticwaves from base stations-Measurements

: 47(2006)→1,625 times (2008)-Support related studies(2000~2011)

Expand e-billing

Eco-friendly LED lighting-Replace lights at 2,000 stores(2008)-Currently replacing add. signs

2,800 3,9005,560

8,000

2006 2007 2008 2009(E)

Unit: 1,000 persons

Phone recovery/recycling

1,264676

1,8282,500

2006 2007 2008 2009(E)

Unit: 1,000 units

Energy saving campaign(2008~)

-Reduce use of disposable items, air conditioning-Install energy-efficient facilities

Expand video conferencing-Korea 56, overseas 3 sites-Replace biz trips

Green TechnologyGreen Technology

Smart Grid business-Participate in Jeju Smart Grid

Pilit Plant(2009)-Develop convergence services

for Smart Place & Smart Transportation sectors

u-City project-Currently developing efficient

city management platform for

energy, environment, and

transportation

Eco lifestyle-ITS(Intelligent Transport Systems)

minimizes travel time and

distance

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Smart Grid

Smart BuildingSmart Building

PHEV1) Management

PHEV1) ManagementSmart HomeSmart Home

2. Smart GridIII. Key Tasks

1) PHEV : Plug-in Hybrid Electric Vehicle 2) M2M : Machine to Machine 3)AMI : Advanced Metering Infrastructure

Apply IT to grid for low-priced consumption

Smart ElectricitySmart Electricity

Smart Renewable : transfer remaining energy to other areas

Energy reduction service via building electricity load management and price info provision.

Smart meter checks fares in real time and allow user to select ideal fare program to meet consumption pattern

Link PHEV and charging infra to provide efficient charging/discharging & telematics link/control

Smart Grid should have far-reaching effects on infrastructure industries (eg, electricity, telecom) and consumer industries (eg, home electronics, construction). SK Telecom is pursuing Smart Grid pilot programs utilizing telecom network resources and preparing for pilot cities.

KeyActivity

KeyActivity

Secure R&C for participation in pilot plant - Partnership, technology, service development

Participation in pilot plant - Solution sourcing, technology development, Smart Grid complex construction, technology verification interoperability check

Secure R&C for participation to prepare for possible expansion of pilot cities by the govt.

Direction

Direction

Secure pilot plant solutions like M2M2), AMI3)

Build complex infrastructure, build exhibition hall, strengthen partnership

Upgrade M2M, AMI technology, upgrade Smart Place technology

Prepare for pilot program ( ~’09)

Prepare for pilot program ( ~’09)

Take part in Phase 1 pilot program ( ~’11)

Take part in Phase 1 pilot program ( ~’11)

Take part in Phase 2 pilot program ( ~’13)

Take part in Phase 2 pilot program ( ~’13)Phase Phase

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3. u-CityIII. Key Tasks

SK Smart City(u-Eco City) offers a differentiated service package and infrastructure platform depending on the urban theme to deliver value to residents, the public, and industrial sectors.

SK Smart City

(u-Eco City)

Higher quality of life (for residents)

Higher quality of life (for residents)

Sustainable City Sustainable CityGood work

environment (for industries)

Good work environment (for

industries)Provide infrastructure and services to support industries in order to ensure city’s self-sufficiency

Build a platform for efficient urban infrastructure and integrated urban management

Offer services that enhance quality of life for urban residents

Efficient city mgt.(for public)

Efficient city mgt.(for public)

City pursuing sustainable competitiveness (address urban issues such as quality of life, environment)

Differentiated green service package depending on urban theme(eg. IIBMS, uRMS, Smart Display, Marketplace, Home Automation)

ServiceService

PackagePackage

Infrastructure control system for seamless urban service by analyzing data compiled via infrastructure and using the data in decision-making

CityCityPlatformPlatform

SK u-City ArchitectureSK u-City Architecture

Value PropositionValue Proposition

City AgendaCity Agenda

Service Package

City Platform

Physical InfrastructurePhysical Infrastructure

Infra-IT Solution

Smart Infra Green-IT Solution differentiated by infrastructure domain (or integrated)

- Urban Utility Center: Model for integrated control of all utilities that facilitates optimal energy usage(World’s first solution for realizing “Energy Efficiency”+”Eco-friendly” +”Cost-Down”)

Infra-ITInfra-ITSolutionSolution

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Intelligent Transport

SystemReal-time traffic

infoReal-time traffic

info

4. ITSIII. Key Tasks

Provide traffic info by region/sector

-Nationwide expressways, expressways in major cities, national highways, main roads in major cities

-Plans to gather and provide traffic info for a wider regional scope[Real time traffic info scope]

Up to ’07

‘08

2,420 km

4,873 km

Ideal 6,300 km

(Total road length is 104,236km)

Shorter driving distance

Shorter driving distance

Road guidance reflecting traffic situation- No. of SK Telecom’s ITS users as of Sep. ’09 : 1.71 million

- Estimated annual CO2

reduction: 176,000tCO2

Public transport info

Public transport info

Info on public transport means like city bus, subways and railroads

- Details such as distance, timetable, fees, transfers

Provide real-time traffic info and navigation service which reflects current traffic situation to minimize travel distance of customer vehicles. Induce use of public transportation by providing related info on public transportation.

Estimated carbon reduction from IT-based navigation in Korea for ’08:

458,000tCO2

- 27.8% of 16 million cars have navigation systems- Increase in average speed due to system: 3.5km/h - Increase in energy efficiency: 2.7%

(Source: National Information Society Agency)

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SK Telecom’s Mid/Long-Term Roadmap for Green ICT

Phase Description

•Launch Green ICT Committee(May 22, 2009)

•Set up eco-mgt system & data mgt. system

•Build foundation to respond to energy/climate change issues

•Form & operate eco-training program

Phase Ⅰ(~ 2010)

Build Build

Green Biz Green Biz Foundation

Phase Ⅱ(~2012)

PursuePursue

OperationalOperational

ExcellenceExcellence

Phase Ⅲ(2013~ )

SecureSecure

Green BizGreen Biz

LeadershipLeadership

•Set up green performance evaluation system

•Greenify purchases & supply chain

•Develop/operate differentiated eco-programs

•Secure leadership in responding to energy/climate change

Build green mgt. strategy/system

Systematic green mgt. operations

Secure global leader capabilities

IV. Future Plans

• Improve operational efficiency

- Introduce efficient operations to Internet Data Center - Adopt Thin Client - Apply new regenerative energy etc

• Unearth new biz opportunities through partnerships in other industries

- 10 strategic IT convergence industries like autos, shipbuilding, energy, aviations, defense, robot, medicine etc

• Improve quality of life through ICT

- Transportation, public administration, finance, education, culture, etc

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Thank you