1. Trend and Challenges in Telecom Convergence Ten-lee Hwang April, 2005

2. 2 Agenda  Trend of Telecom Convergence  Development in 3G, VOIP, and WLAN  Challenges Posed to Service Operators

3. 3 Telecom Industry (communication) main frames desk top computing PC-LAN PC-WAN Intranet/Internet electronic publishing and entertainment Computer Industry (computer) Media Industry (content) Wireline mobility Wireless/Cellular PSTN ISDN PC/Servers 3G/Wireless Internet Carrier class xDSL Trend of Telecom Convergence - - Forces from computer and media industries

4. 4 Wireless GSM AM/FM - Fixed ADSL, Cable Modem PSTN Cable TV Broadcast Mobile VHF/UHF Satellite Cordless Trend of Telecom Convergence - - Starting from traditional telecom

5. 5 Fixed Line operator Mobile operator TV broadcast, Cable channels, Radio broadcast WLAN operator Convergence of new technologies offers opportunities and risks for communication / content players. Wireless Mobile Fixed VoIP GSM @ Home Broadcast Voice Data Voice Data Convergence Trend of Telecom Convergence - - Convergence in delivering network technologies

6. 6 HSDPA 3G/ WCDMA EDGE GPRS GSM Speed (bit/s) SMS Voice Internet Graphics Internet Text Medium quality video High quality video Mobile office 10M 1M 384 k 115 k 56 k 10 k 1 k Messaging Mobile technologies are rolling out 3G and HSDPA to provide a access network with higher speeds. Trend of Telecom Convergence - - Mobile evolution

7. 7 Wireless Mobile Fixed Broadcast Voice Data Voice Data Convergence to services and contents Trend of Telecom Convergence - - Summary TV Cable modem/setup boxADSL M-Taiwan PC/WLAN Celluar/Wifi handsets Contents 3G Convergence of new technologies actually bring convergence to services and contents From mobile to wireless From fixed to wireless From analog to digital, e.g., DAB/DMB Mobile evolution from 2G to 3G

8. 8 Agenda Trend of Telecom Convergence Development in 3G, VOIP, and WLAN Challenges Posed to Service Operators

9. 9 20022003 2004 20052006 WCDMA WCDMA (UMTS)HSDPA 3GPP Release 99Rel. 4Rel. 5 1) As of Sep’04, 39 W-CDMA operators launched. An additional 76 operators had either launched pre-commercial W-CDMA networks or were in the process of deploying their networks at the end of the period. 2) 12 M sub worldwide and Japan,UK,Italy dominate WCDMA uptake CDMA CDMA2000 1X CDMA2000 1XEV-DO Enhanced EV-DO 1) Around 100 operators in 60 countries in six continents have launched CDMA2000 1X services. 2)CDMA2000 1X reach 120M sub worldwide 3)Asia-Pacific continued to be the fast-growing w/89M users and Japan & Korea remain the largest market. 1) There’re 16 operators commercial launch CDMA2000 1XEV-DO service. 2) 10 M sub worldwide Development in 3G, VOIP, and WLAN - 3G WCDMA/CDMA evolution

10. 10 Development in 3G, VOIP, and WLAN - 3G lessons learnt A few things have been important seeing the 3G launch…. More and more countries and operators launched 3G as the technology and handsets become much more ready, demonstrated in recent GSM events. Network readiness was found to be critical for 3G take up. Services and pricing were also found important

11. 11 Today ZyXEL WellTech D-Link Yahoo e-Bay Pchome Skype Hinet Seednet NCIC CHT Nortel CISCO Alctel 99 Multiservice switching IP PBX TDM ATM Switch Media gateway I.E. Internet SW download ADSL Cable Modem 000102030405 GPRS Portal Site Wireless VoIP Gateway IP Phone USB Phone H.323 SIP VoIP Mobile(WLAN +GSM) VoWLAN PABX Switch Gatekeeper From Napa consulting group’s research, 15% of all desktop phones shipped are new VoIP enabled in Y2003. 15% of all desktop phones shipped are new VoIP enabled in Y2003. 50% of all desktop phones deployed will be VoIP enabled in Y2006. 50% of all desktop phones deployed will be VoIP enabled in Y2006. From Napa consulting group’s research, 15% of all desktop phones shipped are new VoIP enabled in Y2003. 15% of all desktop phones shipped are new VoIP enabled in Y2003. 50% of all desktop phones deployed will be VoIP enabled in Y2006. 50% of all desktop phones deployed will be VoIP enabled in Y2006. Network Transport ISP/ISR Value-add Service Application Portal & Channel Device VoIP Finally from concept to reality Development in 3G, VOIP, and WLAN - VOIP industry value chain

12. 12 Development in 3G, VOIP, and WLAN - Rapid growth of WLAN’s 1.United States 17,291 9.Taiwan 643 2.United Kingdom 7,402 3.Germany 4,009 4.France 2,789 5.Japan 1,225 6.Italy 718 7.Spain 672 8.Canada 654 10.Australia 558 Top 10 Countries Source from www.jiwire.com, Oct. 2004www.jiwire.com There are total 57,627 hotspots at 42,803 locations in 75 countries. Top 10 Cities are London (940), New York (725), Paris (692), Tokyo (472), Hong Kong (438), Singapore (365), Chicago (346), San Francisco (341), Berlin (298), and Kuala Lumpur(288). Voice will be the next big thing to emerge in the hotspot market.

13. 13 Development in 3G, VOIP, and WLAN - M-Taiwan status Currently, total 19 wireless broadband application demo sites are sponsored by Industrial Development Bureau Ministry of Economic Affairs (MOEAIDB, 經濟部工業局 ). M-City for Taipei and Kaohsiung were BOT wireless cases in M-Taiwan Plan. BOT: Kaohsiung City  50% City Sub, Y2005  90% City Area, End Y2005 Demo sites sponsored by MOEAIDB Source from www.moeaidb.gov.tw  To cover 800K home subscribers and 10K public subscribers To start from transportation applications  MRT, Y2004 BOT: M-Taipei City Ping-tung Ch'ia-ai Yun-lin Hsin-chu Taoyuan Taipei I-lan Hualien Kaohsiung Kinmen T'ai-nan Taichung Chang-hua

14. 14 With convergence in mobile and wireless, customers can choose which technology to use to make voice calls. IP world - WLAN Cellular world Cellular and WLAN compete for voice and data traffic Development in 3G, VOIP, and WLAN - From mobile to wireless

15. 15 Agenda Trend of Telecom Convergence Development in 3G, VOIP, and WLAN Challenges Posed to Service Operators

16. 16 WLAN のｻｰﾋﾞｽ Overseas Japan One stop service ／ billing Enterprise DB Fixed line broadband Intranet TV conferenc e TV Phone Remote access broadbandemail WLAN service FOMA service 3G area ： high mobility 、 charge by usage WLAN 3G3G WLAN area ： high speed 、 flat rate Intranet TV conferen ce TV Phone Remot e access broadband email Future service image Similar for T-Mobile and SK Telecom Challenges Posed to Service Operators - Linking up celluar and WLAN The incumbent has to continue listening customer needs even if the technologies are disruptive.

17. 17 Challenges Posed to Service Operators - Service operation requires is a process of improvement Access network and technology alone cannot create satisfied customers – there are many things additional for network operations and service operations – will be a challenge to new entrants

18. 18 Thank You