CDMA Data Network & Services of SK Telecom

16 October 2003

Wonsuk Chung

Network R&D Center, SK Telecom Table of Contents

Introduction

CDMA2000 1X & 1xEV-DO Network

Wireless Trends

Evolution Perspective

Conclusion Introduction SK Telecom, Pioneering CDMA Leader

Mar 1984 Established Jan 1996 World’s first commercial CDMA cellular service launched Oct 1999 Handset-based Internet service (n.Top) launched Pioneering Oct 2000 World’s first commercial CDMA2000 1X service launched History Dec 2000 (W-CDMA) license awarded as the top winner Oct 2001 Integrated multi-access Internet portal () launched Feb 2002 World’s first CDMA2000 1xEV-DO service launched

Rapid Subscriber Growth Strong Market Leadership

Subs [SKT’s M/S in Korea cellular market] (thousand) 18,000 Unit : % 17,743 53.6 52.3 52.5 53 15,000 15,179 51.0 12,000 50.6 11,270 10,110 49.7 9,000 STI CDMA Acquisition 6,000 Launch 566 AMPS 1,562 Termination 3,000 5,400 2,299 3,008 Jun Aug Oct Dec Jan Jun Jun 592 - `01 `01 `01 `01 `02 `02 `03 `96 `97 `98 `99 `00 `01 `03 2Q CDMA AMPS Introduction Network & Service Evolution

SKT offers a variety of multimedia services through the most advanced network and plans to enhance service offerings in line with further network evolution

Jan`96 : 95A May `84 October `00 February `02 `03 onward Aug`99 : 95B AMPS CDMA IS-95 CDMA2000 1X 1xEV-DO WCDMA

2,000 1G 3G Still Image Video Streaming 384 Audio Streaming Video Telephony VOD 144 Text Messaging Mobile TV Mobile Advertising Location- 128 Based Voice 64 E-Newspaper 9.6 Voice Digital Image Video Mail Mail E-Book M-Coupon M-Commerce 0 E-Mail

Data Transmission Speed - kbps Mobile Research Telephone (Voice) CDMA2000 1X & 1xEV-DO Network Network Configuration

HLR SMC SCP CDMA2000CDMA2000 1X1X VoiceVoice NetworkNetwork VMS SS7 IP

PSTN

MSC/VLR CGS BTS/ANTS PDA BSC/ANC IWF SCN GW Keeper

BTS/ANTS Internet Notebook AT Gateway IP Phone PDSN Router BSC/ANC HA IP Fax

BTS/ANTS RADIUS AN-AAA Server Video Phone 1xEV1xEV DataData-- DONetworkDONetwork ++ 1X1X CDMA2000 1X & 1xEV-DO Network Network Coverage

’01 1X ’02 1xEV-DO

속초 ’02 1X 속초 동두천 춘천 동두천 춘천 파주 파주 강릉 파주 강릉 김포 남양주 김포 남양주 남양주 인천 서울 인천 서울 동해 동해 인천공항 인천공항 수도권 삼척 수도권 삼척 광주 광주 원주 원주 화성 화성 이천 이천 용인 영월 용인 영월 오산 제천 태백 오산 용인 제천 영월 태백 안성 평택 충주 평택 안성 충주 천안 천안 천안 천안 영주 서산 아산 영주 서산 아산 영주 문경 청주 문경 안동 청주 안동 안동 공주 공주 대전 상주 대전 상주 보령 보령 논산 논산 김천 구미 김천 구미 군산 익산 영천 포항 군산 익산 영천 포항 대구 대구 김제 전주 김제전주 대구 경산 경주 김제 전주 경산 경주 정읍 정읍 울산 울산 밀양 밀양 남원 남원 양산 양산 창원 창원 마산 마산 광주 김해 부산 광주 마산 진주 김해 진주 김해 부산 광양 진해 광양 나주 진해 나주 광양 진해 순천 순천 순천 거제 거제 사천 사천 목포 여수 목포 여수 통영 통영

제주 제주

서귀포 서귀포

Service Max Data No. of Subs Coverage Pop Type Launching Rate (bps) (’03.2Q) (’03.2Q) Coverage

1X Oct ’00 153.6K 12.4 mil. 81 Cities 85%

1xEV-DO Feb ’02 2.4M 1.43 mil. 26 Cities 50% CDMA2000 1X & 1xEV-DO Network Performance of 1X & 1xEV-DO

Category CDMA2000 1X 1xEV-DO

2457 kbps 1 User Physical 153 kbps Max Speed Application 105 kbps 1859 kbps

700 kbps Data Fixed Point 280 kbps Application Throughput Moving 200 kbps 340 kbps CDMA2000 1X & 1xEV-DO Network 1xEV-DO User Devices

Jan ’02 PCMCIA Card

• 1xEV-DO wireless modem for Internet access • Standard PCMCIA Type II Form Factor and Interface • Supporting Windows 98, ME, 2000, XP, CE • Backward compatibility with CDMA2000 1X

June ’02 Dual-mode handset

Camera • High speed WAP services using 1xEV-DO network • Receiving Voice Call during WAP services • 65,000 Color LCD / 40 Poly Sound / 350,000 Pixel Camera

Aug ’02 VOD handset

• Real time video streaming & downloading MPEG files • Recording still images & video clips Camera • 265,000 Color LCD / 40 Poly Sound / 350,000 Pixel Camera CDMA2000 1X & 1xEV-DO Network Internet Access using 1xEV-DO

Enhanced speed Internet access has been possible at anytime, anywhere

Insert into the PCMCIA card Insert directly into the PCMCIA Connect the 1xEV-DO handset slot of the expansion pack card slot of a notebook PC to PC using a USB cable of a PDA Wireless Internet Trends CDMA2000 1X Penetration

! CDMA2000 1X Subscriber base is rapidly growing in Korea ! SKT is the dominant player in CDMA2000 1X market in Korea with 60% market share

CDMA2000 1X Market of Korea SKT’s CDMA2000 1X Subscriber

20,792 ( ‘000 Handsets) ( ‘000 Handsets) 60.0% 12,375

1X Proportion 10,318 SKT’s M/S in 10,000 to Total Subs : 63 % 30.0% 1X Market : 60% as of June 2003 as of June 2003 5,108 6,669 20.0% 5,000 4,181

4,000 3,487 15.0% 4,412 2,692 3,843 3,000 3,268 1,903 10.0% 2,737 2,134 2,000 1,287 1,563 5.0% 1,096 1,000

0.0% 3 01 `01 ` v Oct`01 Jan`02 Aug`01 Sep`01 Oct`01 No Dec Jan`02 Jun`02 Jun.`0 Aug`01 Sep`01 Nov`01Dec`01 Feb`02 Jun`02 Jun `03 Total 1X Subs 1X Proportion to total Cellular Subs Wireless Internet Trends Wireless Internet Usage Patterns

Wireless Internet User Breakdown(1) Content Usage Pattern

RingTones and Characters 39

Mail & Chatting 100% 6% 14 Game 19% 12 80% 43% E-Lottery 9 60% Adult 5 75% 31% 40% Location/Traffic 4

Stocks & Banking 4 20% 26% Broadcasting 3 0% UsUser er Revenue Cartoon/Humor 3 Trial Active Heavy Others (News, Photo, etc.) 7

Source: SKT, as of July 2002 001010 20 30 40 (1) User classification defined as the following: Trial Users: Access wireless Internet 1 - 9x per month Active Users: Access wireless Internet 10 - 29x per month Heavy Users: Access wireless Internet over 30x per month Wireless Internet Trends Major Contents : Picture Downloads/Messaging

" Based on SIS*(Simple Image Service) compression technology " Moving images(3-5 frame/sec) " Features - Picture downloads for screen saver Celebrity moving images (e.g., celebrity images, character images, graphical jokes, luck charms, etc.) - Picture messaging service - Archive for storing previously downloaded content - Drawing tool and bulletin board to make and upload self-made images - Available from both NATE.com and Animated moving images NATE on handset menu " Fee - US$0.50 ~ $2.00 per download " Number of content providers - 26 providers Do-it-yourself images

SIS * : Encoding & decoding solution that enables moving images Wireless Internet Trends

Major Contents : Ring Tones

Most Frequently Downloaded Songs (top 5) " Features - Download ring tones from either NATE.com or NATE on handset portal - Send ring tones to other people’s handsets as a present with message - Diverse types of ring tones (songs, recorded voice, etc.) - Supports Single, 4, 16, 32 and 40 poly (sounds) " Fee - USD $0.50 ~ $1.50 " Number of content providers - 24 providers Wireless Internet Trends MPEG4 Solution “June”

11xEVxEV --DODO HighHigh QualityQuality VideoVideo usingusing MPEG4MPEG4

Mobile Movie Music Video Hot Key

서울 ▲98Km

부산 ▼96Km

Video Mail Traffic Information Real Time News Wireless Internet Trends Data ARPU

! CDMA2000 1X delivers superior Internet usage and ARPU performance ! Color handsets are one of the key ARPU drivers in 3G environment

Data usage by handset Data ARPU by handset

US$ 8.1 (WI ARPU in Won) (As of Jun. 2003) 5,063 4,893

15% 9,726 3,847 3,290 13% 2,736 12% 5,462

US$ 1.2 10% 9% 2,916 8% 1,351

1Q 02 2Q 02 3Q 02 4Q 02 1Q 03 2003 (E)

% of Total Revenues* WI ARPU SMS- 2G WAP 1X WAP Color(1X) based * % of Total Revenues excluding * Wireless Internet Revenue by handset / interconnection revenues # of active users (access Internet more than once per month) Evolution Perspective Technology Evolution Path

! Operators are adopting different migration paths by region and country for 3G deployment ! Considering All-IP network as the final migration path

1995 1999 2000 2001 2002 2003 + 1xEV-DO1xEV-DO 1xEV-DV1xEV-DV CDMA2000CDMA2000 1X1X (Phase(Phase 1)1) (Phase(Phase 2)2) North IS-95-AIS-95-A IS-95-BIS-95-B (Korea,(Korea, US,US, • Higher Cap Voice/ Data America Japan)Japan) • 2.4 Mbps Data . •Voice •Voice • IS-95A/B Compatible • 14.4 kbps circuit •64 kbps Data • Voice Capa (x1.5) CDMA2000CDMA2000 3X3X Korea •IS-95A • 153 kbps Data Compatible • IS-95A/B Compatible •Voice Capa(x 2) • 384k ~ 2Mbps Data • IS-95A/B Compatible All-IP EDGEEDGE -IP IS-136IS-136 (Europe, US) Protocol (Europe, US) System Europe • 384 kbps Packet GSM GSM GPRS W-CDMAW-CDMA GSM GSM GPRS (Europe,(Europe, Korea)Korea) •Voice • 30-40 kbps Packet •9.6 kbps • GSM Compatible • High Capacity Voice • 384+ kbps Packet W-CDMA PDCPDC PDC+PDC+ W-CDMA (Japan)(Japan) Japan •Voice •Voice •9.6 kbps • 28.8 kbps •PDC Compatible * EDGE: Enhanced Data for GSM Evolution GPRS: General Packet Radio Service Evolution Perspective Network Evolution

## TransparentTransparent migrationmigration pathpath fromfrom 2G2G toto 3G3G ## NetworkNetwork evolutionevolution withwith thethe PhasePhase ofof nextnext generationgeneration technologytechnology

PhasePhase 11 (2002~2003)(2002~2003) PhasePhase 22 (2004~2005)(2004~2005) PhasePhase 33 (2006~)(2006~)

CircuitCircuit && PacketPacket NetworkNetwork VoiceVoice overover IPIP NetworkNetwork All-IPAll-IP NetworkNetwork IntegrationIntegration

IP Network All-IP Network Location IP Integration Register Media Media G/W G/W G/W MSC Circuit Network MSC

Radio RNC Call Home RNC Call Home Network Server Subs Server server Subs Controller Data Data Server Server Process G/W node InternetInternet G/WG/W nodenode InternetInternet G/WG/W nodenode Packet Network All-IP integration

Single node integration Evolution Perspective Terminal Evolution

TerminalTerminal improvementimprovement byby developmentdevelopment ofof peripheralperipheral devicedevice andand relatedrelated technologytechnology

$$DigitalDigital camera/GPS/Smartcamera/GPS/Smart cardcard module/videomodule/video communication/M-Commercecommunication/M-Commerce securitysecurity solution/LBSsolution/LBS $$:Semiconductor: higherhigher CPUCPU capacity,capacity, largerlarger storagestorage $$Display:Display: WideWide LCDLCD %%ColorColor LCDLCD %% TFTTFT LCDLCD $$Battery:Battery: Durable,Durable, lighterlighter batterybattery (next(next generationgeneration battery)battery)

2G2G 2.5G2. 3G3G 4G4G

▶▶ Wide-colorWide-color LCDLCD ▶▶USIMUSIM ModuleModule // TFTTFT LCDLCD ▶▶VirtualVirtual RealityReality ▶ B/WB/W andand smallsmall LCDLCD ▶ ▶▶ GPSGPS equippedequipped ▶▶OSOS installedinstalled terminalterminal ▶▶NaturalNatural LanguageLanguage ▶▶LowLow speedspeed datadata ▶▶ BluetoothBluetooth installed installed (WinCE,(WinCE, Linux)Linux) RecognitionRecognition ▶▶ DigitalDigital cameracamera equippedequipped ▶▶HighHigh capacitycapacity CPU/CPU/ ▶▶HandwritingHandwriting ▶▶BrowserBrowser installedinstalled ▶▶ JavaJava installedinstalled terminalterminal largerlarger storagestorage RecognitionRecognition Evolution Perspective Contents Diversification

# Need to know customer needs for developing new services

# Focusing on Customer Segmentation, Targeting and Positioning

# Service Mixing, Customizing & Personalizing will be the key factors for success

SuccessfulSuccessful ServiceService && DevelopDevelop HighHigh TechTech andand SecureSecure Contents!Contents! & ## CooperationCooperation

PartnershipPartnership withwith relatedrelated MobileMobile Operator,Operator, Variation / Differentiation TerminalTerminal Manufacturer,Manufacturer, EnablerEnabler Tech,Tech, of Contents toto developdevelop KillerKiller ApplicationApplication andand ServicesServices

Personalizing Advancement ## NewNew RevenueRevenue SharpeningSharpening ModelModel / Packaging of Contents of Contents ## OpenOpen AccessAccess Conclusion

Global Leader in Wireless Leading Position in Wireless Technology & Product Internet Market Innovation

Technology Evolution to 3G Service Evolution to Multimedia and next ... Thank you