KT Value Creation

KT is leading the future technologies of the world telecommunication industry beyond Korea while creating a new history. KT is launching the world's first 5G service successfully to realize the global 5G era and is promoting ‘intelligent network-based platform business’ thereby pioneering new future for human growth and prosperity.

Media Platform

Corporate & Public Smart Energy Value Enhancement Platform Platform Lead 5G Global Leadership

Disaster, Financial Safety & Security Transaction Platform Platform

A first-grade student, Daesung-dong Elementary School, Daesung-dong 5G Village at DMZ, Korea KT transformed Daesung-dong, the world's only DMZ village, into a '5G Village' based on 5G network and ICT solutions. A student of Daesung-dong Elementary School is dreaming of the future that the fourth industrial revolution will bring through KT Super VR.

14 15 PEOPLE. TECHNOLOGY. Overview KT Integrated Report 2019 KT Value Creation | Lead 5G Global Leadership KT Value Enhancement KT Value Principle Appendix

Lead 5G Global Leadership

5G Global Leadership KT showed the world's first 5G network pilot service at the PyeongChang Win- ter Olympic Games in February 2018 and achieved its success in commer- KT’s View cializing 5G B2B for the first time in the world beginning with 5G frequency transmission on December 1, 2018. As the commercialization of B2C began The 5G network refers to a next-generation mobile communication technology in April 2019, KT plans to enable everyone to conveniently enjoy the 5G net- work and differentiated services through 5G dedicated terminals. KT is leaping with high speed, seamless connection, and large capacity. to become a network platform provider that fuses and connects everything based on 5G. After presenting "5G Global Leadership" at the keynote address of MWC 2015 in March 2015, 2015 February 2018 KT finalized the 5G common specification for the first time in the world in 2016 and is leading the next-generation communications market through the world's first 5G commercialization in April 2019. 2016~7 April 2019

KT will continue to pioneer a new era by providing 5G Vision PyeongChang intelligent network-based platform services based on its 5G global leadership. Announcement Olympic Games

· 5G Test Bed Opening · Demonstrated First and Second Commercialization . 5G-SIG Activities the world's first 5G service Test Events · Interactive Time Slice of 5G · Omni View · Sync View · In December 2018, Began · Hologram Live 5G frequency transmission · 360°VR · In April 2019, Successful commercialization · 5G Safety of 5G for the first time in the world

Evolution of Mobile Network 5G Standardization and Technology Leading

Mobile networks have evolved from the first generation to the fourth gener- ation (LTE, Long Term Evolution) based on the differentiated characteristics by generation. After undergoing the smartphone revolution in the mid-2000s that enabled data communication through 3G, data rapidly increased as data communication evolved into the fourth generation, which enabled the playback of multimedia contents such as video in the 2010s. What is important when mobile generations are replaced is to make it possible for customers to use Success in 'First Securing 5G new communication services anywhere. KT plans to build 5G coverage more KT Leading 5G rapidly than any telecom operators centering on major regions throughout the Call' Based Standard 5G-SIG Commercialization country. on KT 5G-SIG Technology 20Gbps

KT formed the KT 5G-SIG with major On October 25, 2016, KT and Sam- KT developed core technologies of 5G In order to prevent compatibility issues global manufacturers for the world's sung Electronics succeeded in making wireless physical layer and radio ac- between standards from occurring for 300Mbps 5G first 5G pilot service. In cooperation the world's first 5G 'End-to-End' First cess control layer and secured related successful 5G commercialization, KT VR, AR, with the KT 5G-SIG participants, KT Call based on the KT 5G-SIG standard. intellectual property rights. In 2018, presented contributions at the 3GPP completed the world's first full 5G First call refers to data communication among the secured patented technolo- RAN1 and RAN2 standards confer- ABC Automomous vehicle, specification (Layer 1, 2, 3), which en- conducted according to the communi- gies, 17 were reflected on 3GPP RAN1 ence in February 2019 on behalf of 2Mbps abled introducing the 5G service at the cation standard ranging from 'wireless (radio physical layer) and RAN2 (radio TTA domestic member companies and 4G etc. PyeongChang Olympic Games for the link synchronization ' to 'user authenti- access control layer) Standards. KT's made efforts to ensure compatibility of 14.4kbps Multimedia first time in the world. KT greatly con- cation' in which each component be- patented technologies reflected on initial commercial terminals and base Speed 2.4kbps tributed to 5G standardization as indi- tween the terminal and the network is the 3GPP standards are a total of 17 stations. KT has drawn the support of 3G cated by the fact that 85% of the en- operated according to a certain signal. technologies including the technology many 3GPP members in the relevant Video Telephony tire specification shown in KT 5G-SIG This first call is differentiated from ex- for handover of network slices used by discussion and has contributed to the 2G was reflected on the '3GPP NSA 5G isting 5G standard-based technologies terminals among 5G base stations to standardization of 5G such as blocking (3rd Generation Partnership Project because it is based on the common support the mobility of 5G terminals. the approval of Non-backward Com- 1G Digital SMS Non-Standalone 5G)' standard final- standard for 5G wireless communica- These technologies are core technol- patible Change Requests submitted by Analog ized in December 2017, leading the 5G tion developed with major global man- ogies indispensable for 5G service manufacturers. standardization. ufacturers. provision.

16 17 PEOPLE. TECHNOLOGY. Overview KT Integrated Report 2019 KT Value Creation | Lead 5G Global Leadership KT Value Enhancement KT Value Principle Appendix

5G Services 2018 Prize Winning

Best Virtualization Best LTE-5G Convergence The 5G world, being opened by KT, is a world where customers can enjoy Technology Application Award, State-of-the art new and innovative communication services that they have never been expe- Best Innovative Cloud Award 5G Leadership Award Award/Best Artificial Technology Application rienced before anytime anywhere. KT has launched and provides 5G services Intelligence and Automation Award/Best IoT Connection in diverse fields such as security, media, finance, transportation, and medical Award Technology Award care while applying new technologies through 'GiGAstealth' that fundamental- ly blocks hacking utilizing the block chain technology and 'C-DRX', which is a Global Telcoms Awards 2018 World Communication Award 2018 BroadBand Forum Awards 2018 Tech XLR8 Asia Awards 2018 battery saving technology applied to 5G networks for the first time in the world so that customers can enjoy 5G services more safely for longer periods of time.

Best 5G Core Network Best Innovation for LTE Best 5G Technology Technology Award/Best IoT to 5G Evolution Leader Award Provider Award/ Block Chain Innovation of the Year Award

Asia Mobile Awards 2018 Telecom Asia Awards 2018 5G World Awards 2018

Security Smart Factory

Security Solutions Such as 5G-based Real-time Monitoring, Safety and Others 5G-based Smart Factory Solution The 5G network is characterized by ultra-high speed, ultra-low latency, and high reliability, and can be used effectively The 5G Innovation Platform is accelerating digital introduction and business model innovation in the industrial fields in the fields of security and safety where creating a real-time monitoring environment without blind spots is essential. and creating environments so that the precious achievements of the 4th industrial revolution based on 5G can be The '360 Live Security' introduced by KT in MWC in 2019 is a service that helps fast responses on the spot by deliver- spread to all industrial fields. KT demonstrated '5G Connected Robot' and '5G Cooperative Robot in Factory' refer- ing the images taken by 360 degree wearable cameras to the control room in real time through the 5G network while ences at MWC in 2019, and actually constructed smart factories in diverse industries such as the ‘world first smart utilizing the deep learning based image analysis system. This service is differentiated from existing services in that it shipyard’ of Hyundai Heavy Industries, the '5G live stream' of SBS ', the '5G Smart Station' of SRT, and the 'smart fac- has no blind spot because it is a wearable type worn by humans and enables comprehensive responses to situations tory using robots' of apparel maker apM ECommerce, thereby enhancing the efficiency of companies by utilizing 5G. through 360-degree view images.

Cloud-based High-definition Content Next Generation Communication

VRT, Streaming Game Service Live Communication Service Such as AR Videotelephony Now you can enjoy the computer games that have been used from game consoles or high-end PC as streaming games 5G, which enables high-speed and ultra-low-latency uploads, enables sharing even spaces vividly in real time through without having to download them. Based on its excellent 5G technological prowess, KT launched RagnarokClick H5 360-degree images so that communications between humans can be upgraded by one dimension to three dimen- and Love Revolution, which are streaming games, and enables stable networks and real-time operation without delay sions. KT has planned and developed 'Real 360 Service' that can realize the foregoing and launched it in line with the so that high-definition games can be delivered seamlessly. In addition, last year, KT launched Giga Live TV, which time of launching of 5G smartphones in April 2019. The 'Real 360' is a service that enables conveniently shooting 4K is a personal VR theater service to provide VR content via wireless devices without having to connect to a separate high-definition 360 images through neckband-type 360 cameras with which the two hands are free and sharing the terminal such as a smart phone or a PC, and plans to provide high-definition/large capacity content based on cloud images in real time through one-person media live broadcast or group videotelephony. hereafter.

Immersive Media Connected Car

5G-based VR, AR, MR Entertainment Automatic Driving Demonstration Complex, Infrastructure Development and Others As a part of the 5G stadium business, a service to provide the immersive professional baseball game services built To lead the 5G era, which approached as the reality in front of our eyes, KT has evolved 5G into a new platform that has at KT Whizpark through Olleh TV mobile was opened along with the 5G stadium opening game in March 2019. It pro- never been seen thuds far termed '5G-as-a-Platform' beyond intelligent networks. To this end, KT announced its plan vides position views that enables viewing professional baseball games at diverse points of view and matrix views that to leap to become a platform operator based on intelligent networks in 2017 and has been intensively fostering five enables viewing professional baseball games as real time slice videos, enables pitching analysis with VOD including major platform businesses of 'Media, smart energy, financial transaction, disaster / safety / security, and corporate/ analysis data, and provides diverse other services such as motion tracking VOD, schedule / ranking/records. In 2019, public value enhancement’ thereby leading the rapidly changing ICT market. KT plans to upgrade its services such as providing high-light VODs for all games except 5G stadiums.

18 19 PEOPLE. TECHNOLOGY. Overview KT Integrated Report 2019 KT Value Creation | Foster Platform Business KT Value Enhancement KT Value Principle Appendix

Foster Media Platform

Platform Business Evolve into an intelligent media platform that provides distinguished services to customers KT’s View

To lead the 5G era, which approached as the reality in front of our eyes, KT has evolved 5G into a new platform that has never been shown so far termed '5G-as-a-Platform' beyond intelligent networks.

To this end, KT announced its plan to leap to become a platform operator based on intelligent networks in 2017 and has been intensively fostering five major platform businesses of 'Media, Smart energy, Financial transaction, Disaster / safety / security, and Corporate/public value enhancement’ thereby leading the rapidly changing ICT market.

Platform Strategic goal Main business

Evolve into an intelligent media Artificial intelligence TV 'GIGA Genie', KT's media platform business provides customers with new media experienc- Media Platform platform that provides differentiated immersive media such as VR / AR, es by expanding its business to immersive contents such as VR / AR, mobile services to customers etc. media, and artificial intelligence services based on South Korea's No.1 IPTV 'Olleh TV' and unrivaled number of subscribers. In order to overcome the lim- itations of the platform and improve its convenience, KT provides products optimized for customer inclinations using customer analysis algorithms based Providing intelligent service for on Big Data solutions (intelligent curation, intelligent commerce, and targeted all areas of production-consump- advertising). World's first integrated energy tion-transaction such as renewable Smart Energy management platform KT-MEG based energy, energy efficiency, demand Platform energy market innovation management (DR), electric car charging

Based on KT Group's telecom infra- On-line and off-line integrated structure and FinTech capabilities, settlement, next generation Financial leap to become the number one in the certification, financial intermediation, Transaction Platform finance/telecommunications conver- financial intelligence (credit rating Artificial Olleh TV gence platform market information, financial big data), etc. intelligence TV VRIGHT Kids Land GiGA Genie

Lead changes in the paradigms of the Intelligent video service 'GIGA eyes', intelligent video / information security information security solution, Disaster, Safety Based on various IoT technologies, KT Following its launching of 'TVSsok', Following the official opening of down- market, and promote public safety fire/environmental safety solution, has developed and is providing artifi- which combines IPTV and virtual re- town type VR theme park “VRIGHT”, & Security Platform network projects such as disaster next generation public safety cial intelligence TV GiGA Genie that ality technology in May of 2017, KT in which KT invested jointly with GS network and LTE-R networks, etc. combines Giga Internet service and AI. launched ‘TV for learning while playing, Retail, in March 2018, KT additionally KT is expanding its service range to not Service Olleh TV’, which is a premium opened Sinchon branch and Keondae only convenient services for living con- kids content implemented by combin- branch number 2 and newly opened venience such as schedule manage- ing differentiated KT’s technologies an MR Sports Experience Zone K-live Enhance customer value through KT's ment, weather information, and traffic such as the world’s first IPTV VR/AR X Jung-dong branch in September Corporate & Public Deliver differentiated customer value information but also easy payment, in May 2018. In addition, launching 2018. At VRIGHT, you can experience differentiated technology capabilities with systematization and specialized shopping, and education. In addition, 'GiGA Live TV’ version 2.0, which is a diverse VR contents such as Special Value Enhancement / know-how and collaboration with marketing etc. GiGA Genie enables control of home personal immersive media service in Force VR, flight shooting attractions, Platform partners IoT devices such as various electron- April 2019, KT is striving to provide im- and robot experience attractions. KT ic devices. As of the end of December mersive contents and various services is accelerating the provision of immer- 2018, the number of subscribes of KT’s suitable for VR environments. sive media service such as launching GiGA Genie became the number one GiGA Live TV, a personal immersive service in the domestic artificial intelli- media service based on a stand-alone gent speaker market as the number of VR terminals. its subscribers exceeded 1.2 million.

20 21 PEOPLE. TECHNOLOGY. Overview KT Integrated Report 2019 KT Value Creation | Foster Platform Business KT Value Enhancement KT Value Principle Appendix

Smart Energy Platform Financial Transaction Platform

Energy market innovation based on world's first No. 1 in the finance-telecommunications convergence platform market integrated energy management platform, KT-MEG based on KT group's network infrastructure and FinTech capabilities

KT has been promoting smart energy platform business following the launch- Based on the KT Group's telecom infrastructures and FinTech capabilities, KT ing of the GiGA energy brand in 2017, and has grown the business to the scale provides customized financial transaction platform services utilizing data anal- of KRW200 billion by 2018 while creating remarkable business results in all ysis, artificial intelligence, block chains, biometric authentication technology, areas of production (new and renewable energy), consumption (energy effi- and the Internet of things. Actively utilizing its big data and AI technological ciency), and transaction (energy demand management, electric car charging, prowess constructed thus far, KT provides its customers with payment, au- etc.) based on KT-MEG(Micro Energy Grid), which is the world’s first complex thentication, financial intermediation and financial intelligence services. Based energy integrated management platform. As of the end of 2018, energy big on the customer base and platform competitiveness secured through the Fin- data from approximately 1.7 million sites nationwide, with an increase by 70% Tech 1.0 business, KT plans to leap to become the number one operator in compared to the previous year, were collected and analyzed to provide pre- the financial and telecommunications convergence platform market by 2020. diction/analysis/management information for optimum integrated operation.

GiGA Energy GiGA Energy GiGA Energy GiGA Energy Financial Financial Payment Authentication Manager Gen DR Charge Intelligence Intermediation

This is a service that analyzes the This is a service that provides integrat- This is a service to analyze the ener- That is a business that constructs The mobile phone micro payment is In the case of the ‘mobile phone iden- In partnership with major credit rating ‘CLiP,’ an electronic wallet service big data of energy-intensive custom- ed solutions ranging from the design gy consumption patterns of factories charging infrastructures for electric car a representative payment service that tification’ which is a representative fi- agencies (NICE, KCB) in South Korea, that collects and provides custom- ers such as factories, buildings, and and construction of new and renew- and buildings, identify the reduction users, public institution operators, and enables customers to make payments nancial transaction authentication ser- KT has developed and is providing ers' financial benefits such as points, franchise business places through able energy facilities to the operation factors, register the saved electricity site owners, and provides optimal EV for products on on/offline affiliated vice, the scale of use increased every the world's first communication infor- coupons, memberships, etc., is KT's 'e-Brain', an artificial intelligence anal- control service in the field of new and with the Korea Power Exchange (KPX), charging and operation management stores with mobile phones and adds year since the launch of the service in mation based ‘credit score’ that com- representative FinTech service. While ysis engine of KT-MEG platform to find renewable energy. KT is leading the and support the management of the services based on KT Charging Mate, the payment amount to the telecom- 2013 so that the scale of mobile phone bined financial transaction-centered enhancing customer convenience by out factors for energy wastes and re- domestic market of this service by implementation of the reduction, to an electric car charging platform of KT. munication fees when charged. KT is identification service of three telecom- credit rating information and wired/ providing cash receipts, etc., KT up- duce the costs. In late December 2018, establishing about 350 sites through- receives the sales revenue. In 2018, In 2018, KT continuously participated carrying forward this business as a munication companies grew to reach wireless payment receipt/non-pay- graded it to financial intermediation KT carried out pilot projects for three out the country through photovoltaic KT specialists provided the best ser- in the Ministry of Environment's slow ‘telecommunication fee charging busi- KRW 50 billion by 2018. KT launched ment information. Financial Intelli- platform based on financial data such and eight directly managed shops of power, ESS (energy storage device), vice for the reduction orders issued by charger supply projects to establish ness operator’ based on its license 'PASS', a joint authentication brand of gence is a business that provides the as credit cards, car insurance, and as- CJ Foodville and KFC Franchise, re- and local governments’ convergence KPX through real-time monitoring and about 5,300 EV charging infrastruc- as a telecommunication company. In three telecommunication companies in platform to domestic financial institu- set management to create a financial spectively, and achieved energy saving projects. In addition, KT launched leaped to TOP2 status among 25 DR tures and secured about 3,500 cus- addition to the mobile phone micro July 2017 and launched 'PASS', an in- tions and receives platform usage fees often platform business environment. at rates exceeding the target reduction GiGA energy Gen Photovoltaic O & M companies in South Korea. In 2019, tomers. As such, KT is enlarging the payment business, KT also provides tegrated authentication application for and enables financial institutions to In addition, KT strengthened its finan- rate by 10%. The number of custom- (Operation & Maintenance) service, a KT Will continue to expand resource market. Google DCB business, a Google Store three telecommunication companies in additionally secure low-risk customers cial intermediation platform capability ers is rapidly increasing to reach about small/medium sized solar photovoltaic capacity through the discovery of new billing model. In July 2018, KT com- August 2018 thereby securing 5 million while enabling customers to receive further by commercializing an open 950% compared to the previous year. power station business, in July 2018 customers and long-term contracts. mercialized the world's first speak- subscribers with the independent ser- additional financial benefits. Beyond point platform so that customers’ In 2019, KT will expand customers in and is providing the service in earnest. er-based AI voice easy payment 'Genie vice platform that enables faster and the alliances with major domestic fi- credit card company points can be earnest targeting 250,000 franchise Pay' and won the FinTech & Payment easier identity verification with diverse nancial institutions, KT secured a collected and used for payments at af- shops throughout the country. Best Innovation Award in MWC Global means of verification. global reference through the Mongo- filiated stores. Mobile Awards in 2019. lian credit rating information platform 22 contract award. 23 PEOPLE. TECHNOLOGY. Overview KT Integrated Report 2019 KT Value Creation | Foster Platform Business KT Value Enhancement KT Value Principle Appendix

Disaster, Safety & Security Platform Corporate & Public Value Enhancement Platform

Lead changes in the paradigms of the intelligent video & information Enhance customer value through KT's distinguished technology capabilities security market, and promote public safety network projects & know-how in the collaboration with partners

With this intelligent analysis control platform unique to KT, KT is striving to This is a business to not only improve the infrastructures of public institutions provides intelligent video / information integrated security solutions and play a and companies, but also provide integrated consulting services for manage- central role in establishing and operating the national disaster safety commu- ment innovation and new business development, etc. based on KT's differenti- nication networks, thereby minimizing damage to people's lives and properties ated technology capabilities and know-how. In 2018, KT focused on corporate/ and ensuring daily safety. By providing a prediction and prevention centered public customers’ needs to uncover new business models thereby developing integrated platforms, customers can secure everyday safety with minimal cost, new business models such as artificial intelligence contact centers and mobile and public and safety related agencies can quickly identify and respond to notification services and generated new orders worth KRW2.6 trillion. In 2019, situations in emergencies through secure communication channels. KT is uncovering customized business models that meet customer needs through cooperation with partners who have solutions based on artificial intel- ligence and block chains.

National Disaster Safety KT GiGA Secure Safe Artificial Intelligence Mobile Notification Smart Communication GiGA Eyes Security Control Mate Contact Center Service Factory Network

This is a GiGA Internet based distrib- This is a service provided to SMEs KT was selected as a preferred bidder KT operates ‘Safe Mate Anit-Crime’, KT's artificial intelligence solutions are KT improves the reception ratios and 5G is becoming increasingly important uted image analysis / storage platform that cannot easily secure security, for the A & B area of the National Di- which is a crime prevention service, applied to the works of contact centers reduces costs by providing a service and promising in the fields of corpo- service that has been provided since with which KT's information security saster Safety Communication Network and ‘Safe Mate Anti-Fire’, which is a to improve work efficiency and reduce that replaces bills or notices in the form rate/public projects. KT has built smart 2017. The images from IP cameras in- specialists operate and manage se- in October 2018 and KT plans to play large-scale fire prevention service, costs. In order to quickly respond to of paper mails that have been sent by factories in diverse industries such stalled at customer’s business place curity solutions such as the firewall the role of a control tower for the entire applied with state-of-the-art intelligent the needs of diverse customers, when public institutions, local governments, as the ‘world first smart shipyard’ of are stored and analyzed in the KT Intel- and IPS (Intrusion Prevention System) project by 2020, when the project will IoT technologies. Safe Mate is installed counselors receive phone calls, the and financial institutions with mo- Hyundai Heavy Industries, the '5G live ligent Video Security Platform to pro- of the customer on behalf of the cus- be completed. The National Disaster in women's restrooms in 10 stations in- conversation contents are changed bile-based electronic documents or stream' of SBS ', the '5G Smart Sta- vide high-definition monitoring images tomer for 24 hours per day, and 365 Safety Communication Network was cluding Seoul subway Gwanghwamun, into text and displayed on the moni- MMS. In June 2018, KT was designat- tion' of SRT, and the 'smart factory in real time. Customers can record/ days per year. The customer can be introduced after the 2003 Daegu Sub- Wangsimni, and Yeongdeungpo-gu tor as text, so that there is no need to ed as an authorized electronic docu- using robots' of apparel maker apM monitor in real-time in full-HD videos provided with high level safety with- way Fire Disaster and is a network sys- Office Stations so that a scream is separately memorize or type the voice ment relay company by the Ministry of ECommerce. In particular, in May 2019, on the smartphone or PC anytime, out constructing any separate securi- tem that integrated wireless commu- detected, the warning light at the en- of the callers thereby reducing coun- Science, Technology and Information, KT signed a joint collaboration agree- anywhere. In case where an emergen- ty infrastructure at large expenses. In nication networks of disaster related trance to the bathroom sounds, and the seling time drastically. In addition, ar- and has been implementing mobile ment with Hyundai Heavy Industries cy situation such as an intrusion has 2019, KT plans to further upgrade its organizations such as the police, the emergency situation is communicat- tificial intelligence improves counsel- notification (public notification text) for cooperation in 5G-based robot and occurred, alarm images are sent to security control system by significant- fire station, the Ministry of National De- ed to the relevant station employee’s ors’ work efficiency by making drafts service for public institutions. KT's smart factory business, and is striving the customer through intelligent image ly enhancing its Big Data collection / fense, and local governments. In 2019, smartphone. In addition, through the of analysis of customers’ counseling services enables receiving bills, notic- to expand its business fields into smart analysis so that the customer can im- analysis performance and conducting KT plans to build a disaster network to 'Green Subway' project, KT is expand- contents and registering the contents es, etc. from the public institutions by medical care and live broadcasting. mediately respond to the situation. correlation analysis. protect the safety of the public, togeth- ing the women’s bathroom safety sys- with the system. mobile devices without installing any er with small and medium-sized busi- tem at main stations of subway line 5. separate app. ness partners and business operators for other areas. 24 25