Status and Evolution toward

Broadband 3G Cellular

Feb. 20, 2003Feb. 20, 2003

Network R&D CenterNetwork R&D Center

1

Table of Contents

Overview of Korean Cellular MarketOverview of Korean Cellular MarketOverview of Korean Cellular Market

3G Cellular & Broadband Wireless Access3G Cellular & 3G Cellular & Broadband Wireless AccessBroadband Wireless Access

CDMA2000 1XCDMA2000 1XCDMA2000 1X

CDMA2000 1xEV-DOCDMA2000 1xEVCDMA2000 1xEV--DODO

2

Overview of Korean Cellular MarketOverview of Korean Cellular MarketOverview of Korean Cellular Market

3G Cellular & Broadband Wireless Access3G Cellular & 3G Cellular & Broadband Wireless AccessBroadband Wireless Access

CDMA2000 1XCDMA2000 1XCDMA2000 1X

CDMA2000 1xEV-DOCDMA2000 1xEVCDMA2000 1xEV--DODO

3

CDMA Players in Korea

2222G CDMAOneG CDMAOneG CDMAOneG CDMAOneSystemsSystemsSystemsSystems

LGICLGICLGICLGICSamsungSamsungSamsungSamsungHyundaiHyundaiHyundaiHyundai

SamsungSamsungSamsungSamsungMotorola(Daewoo)Motorola(Daewoo)Motorola(Daewoo)Motorola(Daewoo)

LucentLucentLucentLucent LGICLGICLGICLGIC

SKTSKTSKTSKT

CDMA(Cellular)CDMA(Cellular)CDMA(Cellular)CDMA(Cellular) CDMA(PCS)CDMA(PCS)CDMA(PCS)CDMA(PCS)

OperatorOperatorOperatorOperator KTFKTFKTFKTF LGTLGTLGTLGT

17,21917,21917,21917,219Subs.Subs.Subs.Subs.(thousand)(thousand)(thousand)(thousand) 10,33210,33210,33210,332 4,7904,7904,7904,790

TotalTotalTotalTotal

32,34232,34232,34232,342

SamsungSamsungSamsungSamsungLGICLGICLGICLGIC

HyundaiHyundaiHyundaiHyundai

SK TelecomSK TelecomSK TelecomSK TelecomKTFKTFKTFKTF

LG TelecomLG TelecomLG TelecomLG Telecom

SamsungSamsungSamsungSamsungLGICLGICLGICLGIC

HyundaiHyundaiHyundaiHyundaiSK TeletechSK TeletechSK TeletechSK Teletech

HanhwaHanhwaHanhwaHanhwaMaxsonMaxsonMaxsonMaxsonAppealAppealAppealAppeal

Infrastructure VendorsInfrastructure VendorsInfrastructure VendorsInfrastructure Vendors OperatorsOperatorsOperatorsOperators Handset ManufacturersHandset ManufacturersHandset ManufacturersHandset Manufacturers

1111x Systemsx Systemsx Systemsx Systems SamsungSamsungSamsungSamsung SamsungSamsungSamsungSamsung

As of Dec. As of Dec. As of Dec. As of Dec. ’’’’02020202

4

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

'96 '97 '98 '99 '00 '01 '02

SK TelecomSK TelecomSK TelecomSK Telecom KTFKTFKTFKTF LGTLGTLGTLGT

23,405

13,98213,98213,98213,982

6,8286,8286,8286,828

3,1003,1003,1003,100

((((thousand)thousand)thousand)thousand)

26,76226,76226,76226,76228,24328,24328,24328,243

Korean Cellular Market

32,342

53.6%

31.7%

14.7%

Penetration Rate : 68%

5

SK Telecom Highlight ---- SubscribersSubscribersSubscribersSubscribers

'93'93'93'93 '94'94'94'94 '95'95'95'95 '96'96'96'96 '97'97'97'97 '98'98'98'98 '99'99'99'99

( ( ( ( thousands)thousands)thousands)thousands)

10,075

500

1,7002,300

1,600

600600

3,000

5,400

44

1,0002,0002,0002,0002,000

4,0004,0004,0004,000

6,0006,0006,0006,000

8,0008,0008,0008,000

CDMA(SKT)CDMA(SKT)CDMA(SKT)CDMA(SKT)

AMPSAMPSAMPSAMPS11,157

’’’’00000000 ’’’’01010101

10,882

3,5163,205

CDMA(STI)CDMA(STI)CDMA(STI)CDMA(STI)10,00010,00010,00010,000

12,00012,00012,00012,000

CDMA launchCDMA launchCDMA launchCDMA launch

CDMA technology enabled SKT to serve explosively increasing cellCDMA technology enabled SKT to serve explosively increasing cellCDMA technology enabled SKT to serve explosively increasing cellCDMA technology enabled SKT to serve explosively increasing cellular customersular customersular customersular customers6 CDMAOne carriers, 8 1X carriers plus 1 1xEV6 CDMAOne carriers, 8 1X carriers plus 1 1xEV6 CDMAOne carriers, 8 1X carriers plus 1 1xEV6 CDMAOne carriers, 8 1X carriers plus 1 1xEV----DO carrier in Seoul metropolitan areaDO carrier in Seoul metropolitan areaDO carrier in Seoul metropolitan areaDO carrier in Seoul metropolitan area

17,00017,00017,00017,00017,219

STI affiliationSTI affiliationSTI affiliationSTI affiliation

’’’’02020202

6

SK Telecom, Pioneering CDMA Leader

World first commercial CDMA service (Jan. ’96)

World first commercial IS-95B service (Aug. ’99)

World first commercial WAP service (Feb. ’00)

World first commercial CDMA2000 1x service (Oct. ’00)

World first commercial 1xEV-DO service (Jan. ’02)

World first EVRC service (Jan. ’98)

7

Overview of Korean Cellular MarketOverview of Korean Cellular MarketOverview of Korean Cellular Market

3G Cellular & Broadband Wireless Access3G Cellular & 3G Cellular & Broadband Wireless AccessBroadband Wireless Access

CDMA 2000 1XCDMA 2000 1XCDMA 2000 1X

CDMA 2000 1xEV-DOCDMA 2000 1xEVCDMA 2000 1xEV--DODO

8

Broadband wireless Access & 3G Cellular

Main GoalProvide Service to a large number of sub.(in automobile)

Limitations• Capacity• Too many standards• Analog communication

1G: Analog

• Capacity increase• Digital Communication• Common standard

• Unified Access forvoice and data service

2G: Digital

• New growth engine and revenue from wireless data service

3G: Unified Access to voice & data

Various technologies are competing in broadband wireless arenasuch as W-LAN, LMDS

However, mainstream will be 3G Cellular

9

CDMA20001X

2001 2002 2003 ~ 5 2006 ~ 10

4G Network

(???)

~ 2000

AMPSIS-95 A/B 1x EV-DO 1x EV-DV

(??)

WCDMA(?)

3G Cellular Evolution in Korea

GSM/GPRS EDGE

10

Overview of Korean Cellular MarketOverview of Korean Cellular MarketOverview of Korean Cellular Market

3G Cellular & Broadband Wireless Access3G Cellular & 3G Cellular & Broadband Wireless AccessBroadband Wireless Access

CDMA 2000 1XCDMA 2000 1XCDMA 2000 1X

CDMA 2000 1xEV-DOCDMA 2000 1xEVCDMA 2000 1xEV--DODO

11

’01 1X’02 1X & 1xEV-DO

CDMA2000 1X Coverage

2001.12

81 Cities : Urban AreasCoverage : Pop.-based 79%

2002.12

81 Cities plus Extension to Suburban Areas & HighwaysCoverage : Pop.-based 88%

인천공항인천공항인천공항인천공항

영월영월영월영월

서울서울서울서울인천인천인천인천

수도권수도권수도권수도권

대전대전대전대전

광주광주광주광주 부산부산부산부산김해김해김해김해

울산울산울산울산

대구대구대구대구경산경산경산경산

포항포항포항포항

경주경주경주경주

영천영천영천영천

구미구미구미구미김천김천김천김천

상주상주상주상주

문경문경문경문경

영주영주영주영주

안동안동안동안동

양산양산양산양산

밀양밀양밀양밀양

창원창원창원창원

진해진해진해진해

마산마산마산마산

거제거제거제거제

통영통영통영통영

사천사천사천사천

진주진주진주진주

광양광양광양광양

여수여수여수여수

순천순천순천순천나주나주나주나주

목포목포목포목포

제주제주제주제주

서귀포서귀포서귀포서귀포

정읍정읍정읍정읍

남원남원남원남원

김제김제김제김제 전주전주전주전주

익산익산익산익산군산군산군산군산

논산논산논산논산

보령보령보령보령

서산서산서산서산 아산아산아산아산

천안천안천안천안

공주공주공주공주

청주청주청주청주

충주충주충주충주

제천제천제천제천 태백태백태백태백

삼척삼척삼척삼척

동해동해동해동해

강릉강릉강릉강릉

속초속초속초속초

춘천춘천춘천춘천

원주원주원주원주

평택평택평택평택

용인용인용인용인

안성안성안성안성

이천이천이천이천오산오산오산오산

화성화성화성화성

광주광주광주광주

남양주남양주남양주남양주

동두천동두천동두천동두천

파주파주파주파주

김포김포김포김포

2G : Whole Country

12

1,334

3,268

5,539

9,936

621200

May,'01 Jul,'01 Sep,'01 Dec,'01 Apr,'02 Dec.'02

((TThousandhousand, Subscribers), Subscribers)

CDMA2000 1x Subscriber Data ARPU (2G vs 1X)

CDMA2000 1x Subscriber & ARPU

2,8572,8572,8572,857

5,1455,1455,1455,145

IS- 95IS- 95IS- 95IS- 95 CDMA2000 1xCDMA2000 1xCDMA2000 1xCDMA2000 1x

(KRW, Mar.(KRW, Mar.’’02)02)

13

1,2651,2651,2651,265 1,3811,3811,3811,381 1,5561,5561,5561,556 1,7281,7281,7281,7282,1402,1402,1402,140

2,5502,5502,5502,550

5,5695,5695,5695,569

Sep. ' 00Sep. ' 00Sep. ' 00Sep. ' 00 Dec . ' 00Dec . ' 00Dec . ' 00Dec . ' 00 Mar. ' 01Mar. ' 01Mar. ' 01Mar. ' 01 Jun. ' 01Jun. ' 01Jun. ' 01Jun. ' 01 Sep. ' 01Sep. ' 01Sep. ' 01Sep. ' 01 No v . ' 01No v . ' 01No v . ' 01No v . ' 01 Dec , ' 02Dec , ' 02Dec , ' 02Dec , ' 02

Voice ARPU vs. Data ARPU

Wireless Internet ARPU

30,890

33,835 34,51535,921 36,189 36,529

34,826

Sep.'00 Dec.'00 Mar.' 01 Jun.'01 Sep.'01 Nov.'01 Dec,'02

Voice MOUVoice MOU

10% 10% Increase / Year

Increase / Year

(KR(KRW)W) (KR(KRW)W)

100% 100% Increase / year

Increase / year

Voice ARPU

198198198198187187187187183183183183

153153153153

178178178178175175175175

Price Reduction by 8%

14

Top 10 1x Contents

Character /Ring-tone Download

Game/Entertainment

TTL Joynet

Email/Chatting/Community

Event (nJoy Money)

Stock Info/Finance/Bank

Location/Traffic/Travel

35.7%

17.9%

7.1%

5.8%

4.1%

3.2%

2.7%

15

Overview of Korean Cellular MarketOverview of Korean Cellular MarketOverview of Korean Cellular Market

3G Cellular & Broadband Wireless Access3G Cellular & 3G Cellular & Broadband Wireless AccessBroadband Wireless Access

CDMA 2000 1xCDMA 2000 1xCDMA 2000 1x

CDMA 2000 1x EV-DOCDMA 2000 1x EVCDMA 2000 1x EV--DODO

16

Comparison of 1x & 1x EV-DO

Category 1x EV-DO

1 UserMax

Speed

Physical

Application

2457 kbps

1859 kbps

DataApplicationThroughput

Fixed Point

Moving Point

700 kbps

339 kbps

CDMA2000 1x

153 kbps

105 kbps

280 kbps

200 kbps

17

EV-DO service, graphically more rich

Information Music Video Movie Preview

World Cup Games Animation

18

1x EV-DO End user devices

Jan 28, ’02 PC Card (by GTRAN)

May ’02 Dual-mode handset (by Samsung)

Sep ’02 VOD handset (by Samsung)

Mar ’03 Video telephony handset (by Samsung)

Camera

Camera

PC Card Dual-ModeHandset

VODHandset

19

Handset in Commercial – EV-DO

SCH-E100 SCH-V300SCH-E110

SV-110 (LG) V740(Motorola) SCH-E150SCH-E120 SCH-E130

IM-5300(SKTT)