1. 2006. 6.13 Current Major Issues on Digital Cable TV Dr. Ki Hyun Sung

2. - 1 - Current Status Ⅰ What’re Problems? Ⅱ Agenda How to Overcome? Ⅲ

3. - 2 - Current Status of Digital CATV Why Digital? –To have competitiveness Telco’s IPTV, DTT’s MMS, Skylife’s SMATV, Telco & EE’s TV Portals, PCs (Intel’s ViiV),… War to have a home gateway –To satisfy our customers’ needs and requirements Internet, Mobile users  Kool Kids & Gadgetiers However, still massive passive markets –To recover Pay TV markets back to normal Circumvented and abnormal market with world class low ARPU

4. - 3 - Current Status of Digital CATV How Digital? –Over 1 years after the commercial digital CATV services But, only cross more than 100K digital subs Value added services such as VoD, Interactive data services just minimal. –TPS not yet  no bundling effects –Slower and lower than expected.

5. - 4 - Current Status of Digital CATV What’re problems? –Commercial Subscription fee: So high compared to analog TV Channel tiers of Analog TV: no contents difference  no incentive for digital TV Usability and Adaptability (passive vs. active) Marketing Capability (analog vs. digital) High STB costs (M/W, CAS, CableCard, Interactive Svcs..) –Technical Stability: STB, CableCard, Access network, Picture quality: High expectation, but not much better than analog TV.  back to the past. Complexity: remote controller, UI, EPG, navigation menu…  only channel zapping

6. - 5 - Network Quality for Two Way Services Technical Support/ Installation What’re Problems? Analog TV Subscribers Digital System Networks Low Subscription Fee Too many Channels Relatively Good Picture Perception of TV  TV is free like utility  Lean Back (passive) No incentive for Digital SOs Paradigm Shift  Strategy/Marketing  Human Resources…. Investment Costs High STB costs (CableCard, M/W,..) Stability (CableCard, STB, Applications..) Complex UI/Navigation: Usability Technical

7. - 6 - Ways to Overcome Problems Picture Quality Usability Network Quality STB Costs/Stability SD to HD Simple/Easy UI & Navigation Flawless Maintenance CableCard,…. ProblemsSolutions

8. - 7 - CableCard Idea of CableCard is still good for retail markets for STBs. However, some issues are against operators and DCAS is developing for the replacement. Economic Issues –High STB Costs: more than $30 including a Cablecard & its related costs Lower STBs for mass deployment & proliferation of digital CATV Comcast: about $50 STB, UPC: below €100(M/W, CAS) for D4A(digital for all) –High Maintenance Costs: A/S calls & Replacements Technical Issues –Long Channel Tuning Time –High Temperature –M-Card Development USA MSO’s Strong Direction/Will to DCAS

9. - 8 - SD to HD (High Def.) Why HD? –Among others, the best weapon to IPTV, Skylife, and DTT’s MMS. –Superior picture quality  incentive to subscriber (no turning back to analog or SD) Problems? –Bandwidth Hogs: analog TV tiers, 64QAM  256QAM (network sensitive), frequency allocation, MPEG2 and/or MPEG4 –High STB costs (1.5 times of SD STB) –HD contents To be or not to be? IPTV, MMS, Skylife HD