WiBro Deployment & 3G Evolution in Korea

- 2/18 - KT Overview 1981 Established KT Corporation 1993 # of Telephone lines reached 20 M 1999Opening of local telephony market 2002 Privatization completed Population: 47.8 MHousehold: 15.3 M As of December 2004 # of EmployeesRevenue (2004) Telephone Subscribers Broadband Subscribers

- 3/18 - Service Provider Manufacturer Customer Government Saturation of market Telecommunication Fixed broadband Prosperity of IT Industry Adoption of BcN Breaking economic depression Demand 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

- 4/18 - Korea Broadband Market Bandwidth 1000 Times Bandwidth 1000 Times 50M56K 9504 Internet User 103 Times Internet User 103 Times 31M0.3M PC 5 Times PC 5 Times 26.2M5.4M 2M 4M 6M 8M 10M 12M Dec. 2001Dec. 2002Dec. 2003May 2005 Wireline Broadband Total ADSL/VDSL Cable Subscriber Status LAN 6.7M 4.2M 1.2M 12M Mobile 1xEV-DO 11M

- 5/18 - 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. CAGR = 4.77% CAGR = 20.2% CAGR = -3.08% CAGR = % Fixed Voice Fixed Data Mobile Voice Mobile Data

- 6/18 - Revenue Share for Fixed ServiceRevenue Share for Wireless Service (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 Data service revenue is 35 % of fixed and 23 % of mobile revenue.

- 7/18 - User terminals 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? 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 PC PDA Smart phone

- 8/18 - 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) Characteristics Data centric Voice centric Data Rate 2G (IS-95, Cellular) Mobility Wired phone Cordless phone WLAN High speed Internet (xDSL) 3G (W-CDMA) Positioning WiBro, Mobile WiMAX Superior in coverage & mobility Superior in data rate & access cost

- 9/18 - 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 2G/2.5G 4G Convergence Network 3G 3.5G Wireless Local Loop AMPS GSM / cdmaOne WCDMA / cdma-2000 HSDPA / EV-DV WLL IEEE IEEE IEEE e WiBro WiFi LAN Cellular Internet Nespot Megapass FTTC FTTH ADSL/VDSL

- 10/18 - source: Maravedis (2004) source: Korea Information Strategy Development Institute (2004) 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)

- 11/18 - 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 Portal Web site UserCP Fixed/wireless Convergence + Open network Market Barrier Current mobile Internet service architecture Future high-speed mobile Internet service architecture Business Model Strategy

- 12/18 - Development of multimedia and convergence application using existing infra Creation of brand new customer experience Application of core technology of KTs 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 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 Core Service Package Service Information (Web surfing, , etc.) Entertainment (Movie, VOD, etc.) Others: e-Stock, e-Banking, e-Learning Evolution Existing Internet Service WiBro Killer Applications Fixed Service

- 13/18 - Network Architecture Transfer Network Internet Back Bone Server Farm Access Network switch WiBro Zone AAA(Diameter) HA Metro Ethernet RAS Internet NodeServer Farm ACR KT BcN Operate Management System(Backend) Application Service Server(Core) Repeater WiBro Network Architecture WiBro Network? KTs 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

- 14/ 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 Deployment Network Integration KTs commercial WiBro service in Seoul in April 2006 Network integration with KTs existing infra Network Deployment & Integration Strategy WiBro/Mobile WiMAX 2G/3G Network WiFi

- 15/18 - Early stage Growing stage Matured stage WiBro only PCMCIA PCMCIA Embeded modem Embeded modem PDA PDA WiBro + WiFI WiBro + CDMA WiBro + DMB DBDM TBTM WiBro + WiFI + DMB WiBro + WiFi + CDMA WiBro + CDMA + DMB Personal/business Personal/business Convergence Application specific Customized one chip Terminal Roadmap

- 16/18 - Mar 2005 Nov Phase II Large & Medium Cities - Phase III Medium & Small Cities KTs Licensed Spectrum - Phase I Initial Commercial Service (Seoul Metropolitan Area) Aug 2005 Commercial Service Site Construction APEC Demo KTs WiBro subscribers 3.1 Million KT WiBro revenue 1.2 Billion USD Cumulative Capex 1 Billion USD 2010s Key Target Figure Service Rollout Plan

- 17/18 - APEC Demonstration First mover to hold WiBro demonstration Date: Nov. 12 ~ 20, 2005 Place: Busan, Korea Guest: Presidents and VIP of each nation, Major companys CEO, The Press Demo Area: Bexco, DongBaek island, resort areas

- 18/18 - WiFi IEEE802.16d/e Air Interface standard Expanded WiMAX WiFi Liaison Interworking WiBro Fixed Mobile WiBro B3G Solution in Korea and Worldwide

- 19/18 - Relaxed regulation Extensive network & terminal expertise Manufacturing & operating Vision for WiBro/Mobile WiMAX Mutual cooperative partnership WiBro WiMAX

- 20/18 - Broadband Life Partner Sung Ho Yoon KT London Office