1. GLOBECOM 2004 IEEE COMMUNICATIONS SOCIETY Telecom Business Forum Thursday, December 2, 2004 Beyond Broadband Business Sanghoon Lee KT

2. Beyond Broadband Business — 2 Thursday, December 2, 2004 Telecom Business So Far 1990s: Golden age After 2000: -Downfall of Main Revenue Stream -(PSTN & leased line biz) Symptoms -Competition -Commoditization of bandwidth & connectivity -IP technology -Moore’s law outpacing demand -Stock market collapse

3. Beyond Broadband Business — 3 Thursday, December 2, 2004 Broadband & Wireless/Mobile as a Rescue Broadband take-up over first 10 years is faster than previous services across the OECD countries. Cellular Subscribers (1985-1995) Broadband Subscribers (1997-2003) Narrow-band Internet Subscribers (1992-2001) ISDN Subscribers (1989-1999) Mobile/wireless market goes over the fixed communication market Fixed Broadband CAGR 44% Fixed, CAGR 1% (POTS/ISDN) Mobile, CAGR 13% No of Subscriptions (million) 0 300 600 900 1200 1500 1800 20002001200220032004200520062007 2.5 / 3G

4. Beyond Broadband Business — 4 Thursday, December 2, 2004 Two Sides of Broadband Internet Business in Korea ThreatOpportunity &  Revenue: Saturating market with flat rate  Expenditure: Increasing CAPEX/OPEX due to doubling traffic  High customer expectation level  Has established - high quality infrastructure - Large customer base  Opportunities in application & value-added services (Unit : Thousand)

5. Beyond Broadband Business — 5 Thursday, December 2, 2004 Beyond Broadband Business > From simple Internet access to “quality life/work services” > From network service to application services Browsers Web Pages HTTP FTP … Any-Access HTTP RTSP VoIP WAP RTP Wireline Wireless Tomorrow Rich Contents P2P,Game Servers TodayYesterday Simple Internet Access Quality Life/work services

6. Beyond Broadband Business — 6 Thursday, December 2, 2004 Two Basic Questions for Telcos A B 1.Will |A| >> |B|? 2.Will Telcos dominate the market?

7. Beyond Broadband Business — 7 Thursday, December 2, 2004 Beyond Broadband Business: Features > Different business From access service to end-to-end service Both best-effort & quality service From network service to solution/application services Applications: from niche market to mass revenue market > Different focus Ubiquity Personalization Convergence Quality Handy Current broadband “access” business Bandwidth Beyond broadband business

8. Beyond Broadband Business — 8 Thursday, December 2, 2004 The Next Generation Network > The following picture has been in place for more than 10 years Services Data/IP Networks Mobile Networks PSTN/ISDN CATV Access Transport & Switching Networks Wireless Access Wireline Access Multi-Service IP Backbone Existing and newly emerging services Network control (QoS, Security, IP Mobility) Too costly, per-service network architecture Single/simple/cost-effective network infrastructure for existing & new services

9. Beyond Broadband Business — 9 Thursday, December 2, 2004 NGN: From Vision to Reality > BcN Initiative in Korea high-quality broadband multimedia services integrating telecom, broadcasting, and Internet seamlessly at anywhere, anytime, and using any devices