0 0 Oct, 15, 2002 Dr. Terry Ahn New Business Group, KTF 2002 KTF Mobile Internet Service Update

I.Overview of KTF and Korean Market

History of KTF Founded in January 1997 Launched PCS services in October 1997 Strategic alliance with Microsoft, QUALCOMM and CDPQ in Nov Listed on Kosdaq in Dec Acquire 500M subs in the shortest period in May 2000 Merged with KTM.com as of May 1, 2001 Altered Company’s name to “KTF” in June nd largest wireless company in Korea with 33% combined market share(sub : 10.1M, August 2002) Company Profile Major Shareholders KT 40.2% Others 53.4% Microsoft 1.7% Qualcomm 2.4% CDPQ 2.3% ( The end of 2001)

Cellular penetration : ~ 65% ( 31M out of 47.7M pop., July 2002 ) 1x-RTT Sub. & penetration : ~ 36.8%(11.4M out of 31M, July 2002 ) Mobile Browser standard & penetration (July 2002, Korea MIC) Total Subs.ME / WAPBrowser M/SPen. Rate KTF10.1 mil8.1 mil ME35.1%80.2% SKT16.6 mil11.9 mil WAP51.5%71.7% LGT4.3 mil3.1 mil WAP13.4%72.1% Total31.0 mil23.1 mil100%74.5% Korean Mobile Market Penetration Rate by Age Group 9% 36% 89% 98% 76% 23%

1998.3~ ~ PersNet ® Service Mobile Browser : ME ~ HandyNet (Interactive SMS) Intelligent Integrated Interactive Mobile Internet Service Evolution ~ multipack New Brand Advanced Mobile Browser(ME1.2~) Icon type Application Download ~ MMS VOD 3G Service Multimedia 1x-RTT 1xEv-Do IS-95B IS-95A IS-95B From Text to Multimedia !!! Broader Bandwidth !!! 2G 2.5G 3G

II. Operator’s role in the value chain

Business Value Chain of Mobile Internet Operator Network Operation Billing Marketing & Promotion Customer Care Operator Network Operation Billing Marketing & Promotion Customer Care Contents Provider Contents Provider Customer Technology Provider Technology Provider Service Provider Service Provider Handset Manufacturer Handset Manufacturer Contents Fee Business Value Chain Service Provider Service Provider Contents Provider Contents Provider Contents Provider Contents Provider Service Fee Airtime Charge + Billing Margin Solution Fee

KTF Mobile Browser Services

Ringtone Downloading Character Downloading MSN (Portal&Mail) DAUM (Portal&Mail) Top 5 Contents for 2G Magic ⓝ ※ Data Source : KTF statistics(July, 2002) Picture Downloading 1st 2nd 3rd 4th 5th The Number of Browser-enabled Handsets : 8.1M in the market The top ranking services are digital accessories for decorating handsets Contents Tops of magic ⓝ

Mobile Browser Business Experiences Carrier as a all-round player : Carrier does SP’s role Growth Factor of Mobile Internet # of CPs X # of SPs X # of Data-enabled Handsets in market Bottleneck of Business Structure - Many CPs, Only One SP(KTF)-Only One App.(ME Browser) New business model and more SPs(Apps) are needed !!! Operator Network Operation Billing Marketing & Promotion Customer Care Operator Network Operation Billing Marketing & Promotion Customer Care Contents Provider Contents Provider Customer Technology Provider Technology Provider Handset Manufacturer Handset Manufacturer Service Provider Service Provider Contents Provider Contents Provider Contents Provider Contents Provider ME/WAP Browser Contents Delivery

III. The emphasis shift from contents to applications

… SMS Client UI ME Browser E-Book Viewer VOD Player Stock Browser Map Browser... OEM App MSM ChipUI Middleware Platform MSM Chip Enabler ME/WAP Browser CCCC Contents Shift from Contents to Application CCCC Contents CCCC News Viewer Game Applications Focus on App. Focus on Contents App. Download Over the Air Handset Architecture Icons on PC Screen BREW or JAVA

KTF Magic ⓝ multipack Services multipack

New Win-Win Business Model Providing various and easy-to-use services by App. Downloading  Satisfying Customer Needs Wireless S/W Sales Business : Newer and More Revenues to CP/SP Increasing Data Airtime of Operators Operator Network Operation Billing Marketing & Promotion Customer Care Operator Network Operation Billing Marketing & Promotion Customer Care Contents Provider Contents Provider Customer Technology Provider Technology Provider Handset Manufacturer Handset Manufacturer Service Provider with Applications Service Provider with Applications Contents Provider Contents Provider Contents Provider Contents Provider Application & Contents Delivery multipack Service Provider with Applications Service Provider with Applications Middleware Platform New win-win business model enlarges mobile internet market

Theme Park (Ringtone&Character Downloading) VOD Player Internet ‘Go Stop’ (Online Game) Top 5 Contents for 1x Magic ⓝ multipack ※ As of July, st 2nd 3rd 4th 5th Karaoke Internet Adult TV (Picture&Video feeds) Service Tops of Magic ⓝ multipack User-Friendly, Icon Interface Multi-pack Subscribers (‘000)

1xRTT and Wireless Data Performance Number of 1xRTT Subs (unit : Thousand) Data ARPU / Total ARPU (KRW Bn) Data Service Revenue 1x ARPU by Handset (1) (KRW) (1) As of June 2002

Key Success Factors Early Mover : Early launch of Data Services in 1998 – Data Enabled Handset Supply  Basic Infra for Mobile Internet Standardized Handset Functions by Carrier, not Manufacturer Marketing&Promotions / Customer Training for use Color LCD and MIDI Handset / High Speed Network(1xRTT, 1xEv-Do) / Multimedia Platform Large Numbers of Content and Service Providers - Killer Services, Win-Win Business Model Value to Customers !!! Fast, Easy, Fun & Useful !!!

IV. Openness as the key ?

Openness as the key ? Operator CP magic ⓝ Operator Master CP SP CP magic ⓝ ISP1 ISP2 ISP3 CP Operator Master CP SP Stage 1 Billing SMS MMS LBS menuDomain commerce Java Map Stage 2 Next Stage Open to All Openness gives more data revenue to Operators Openness gives more business chances to SPs/CPs Openness gives more service satisfaction to Customers

V. New Growth Factors : 3G Services

Multimedia Messaging Service(MMS) Multimedia Messaging Service(MMS) Phone to Phone Long Text Text + Image, MIDI, Video clip Text + Video message Handset with Digital Camera Phone to Web to Phone Long Text Text + Image, MIDI, Video clip Text + Video Message Handset with Digital Camera to phone(push service) Contents delivering(News, Education, MP3, Video clip, etc)

Streaming VOD ( Live Broadcasting of TV ) Store & Play VOD Small Video Clip Education, Music Video, Movie preview, News ….. Long time video clip TV broadcasting, Movies Video On Demand (VOD) Video On Demand (VOD)

Thank you. 3G