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U U U U U U U- U - - communication - - - - - communication communication communication communication communication communication communication Korea Mobile Market Trend for Convergence & Ubiquitous Communication 2004.


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Korea Mobile Market Trend for Convergence & Ubiquitous Communication

SK Telecom

  • 2004. 03. 04.
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Table of Contents

Subscribers & ARPU Market Growth Factors Technology Evolution Global Competitiveness I I . Market Driven Factors I I . Market Driven Factors I I I . Market Paradigm Shift I I I . Market Paradigm Shift I . Mobile Market Situation I . Mobile Market Situation

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Wireless & Wired Penetration Rate

0% 20% 40% 60% 80% 97 98 99 00 01 02 03E 04E 05E Mobile Fixed Line

Wireless subscription surpassing wiredline's (Sep 99)

Expectations 71% 48%

Mobile Market Shares In Korea

  • 1. SK Telecom

! Subscribers : 18.3 Millions ! ARPU : U$38 (Data $6 included)

  • 2. Other Players

Subscribers : 15.2 Millions ARPU : U$32 Major Asia Nations Penetration Rate

!Taiwan : 90.6 % ! Hong Kong : 83.1 % ! Singapore : 71.6 % ! Japan : 50.1 %

* Source : Global Mobile (Year 2001)

! Korea Wireless Market : 71 % (Yr. 2003)

  • I. Mobile Market Situation

5 10 15 20 25 30 35 40 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03

Wireless sub surpassing wired line's (Sep 99)

5mn 10mn 20mn 33.6mn 5 mobile operators to 3 players Total Sub. Total Sub. Total Sub. Total Sub. 30.5mn

Subscribers & ARPU

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Market Growth Factors

Data Market Growth (Source : SKT Data)

(Current Data APPU Ratio : 15% vs. Yr.2002 : 10% )

1 2 3 4 5 6

1999 2001 2003 2005 2007 2009

Data Voice

Data Service Expansion (Multimedia etc.)

(Current Throughput : Avg. 600kbps)

Global Telecommunication Unification

  • Global Roaming : CDMA 13 nations,
  • GSM-CDMA Inter Standard Roaming 44 nations

(Source : SKT Data Yr. 2003)

Data Voice Video Video I nternet Multiservice Network

Paradigm Shift of Technology & I ndustry

(Company & Company " Industry Integration)

  • I. Mobile Market Situation
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Technology Evolution

5 GHz W-LAN High Speed Wireless

1995 1995 1995 1995 2005 2005 2005 2005 2010 2010 2010 2010

Portability

High Low 2000 2000 2000 2000

Mobile Access Fixed/ Local Area Wireless Access 2G/2.5G

Cellular/PCS

3.5G 3G

Transmission Speed

High Low (Voice) (Data) (I mage/ Graphic) (Moving Picture/ Digital TV) (High Quality Video Streaming / Multimedia)

WLL

4G 4G 4G 4G

Very High Speed Multimedia Service

IMT- 2000 Service IMT- 2000 Improvement

2-11 GHz W-Broadband

B-WLL, 802.16 UWB 802.11b/a/g

2.4 GHz W-LAN

  • I. Mobile Market Situation
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Global Competitiveness

Total Telecom. Market Volume (Yr. ’01)

USA Japan U.K 302.8 118 66.2 Korea 18 Aus. 13.4

(Unit: U$ Bil.)

Mobile Market Sales Revenue (Yr.’01)

USA Japan U.K 69 68.9 11.9

(Unit: U$ Bil.)

Aus. 3.2 Korea 10.8

# Accounting for U$18 Billion

# The 9th ranks among OECD 24 nations

Wired/Mobile Subscribers in 100 People Basis ( Yr ’02)

# 100 Unit Subscribers of the Population :

  • Wired Line-the 21st ranks,
  • Mobile-the 18th ranks

OECD Avg. 66.2 OECD Avg. 10.3 USA Japan UK 114 129 129 Korea 117 Aus. 118 OECD Avg. 130 49 62 85 68 64 74

Internet Users (Yr. ’02)

USA Japan UK 155 57 24

(Unit: Mil.)

Aus. 8 Korea 26 OECD Avg 16

L M

  • I. Mobile Market Situation
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Customer Segmentation Segmentation Brands Power Wireless Data Market Growth I I . Market Driven Factors I I . Market Driven Factors I I I . Market Paradigm Shift I I I . Market Paradigm Shift I . Mobile Market Situation I . Mobile Market Situation

Table of Contents

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Customer Segmentation

  • II. Market Driven Factors

Segment 3 Mobile Biz. Person Segment 6 Work & Family Segment 8 Pleasure Phone Segment 7 New Generation Segment 4 College/ Trainee Segment 1 Non-Mobile Medium Usage Segment 2 Old Generation Segment 5 Happy Hour Segment 9 Eventual Phone

  • Overall Medium Usage
  • Work_Driven Weekday Pattern
  • Night_Life Saturday Pattern
  • High Usage in High Rate Period
  • Low Mobility
  • Small Sphere
  • Overall High Usage / Weekday Pattern
  • Worker Weekday Pattern Saturday Daylight Pattern
  • High Proportional Usage in High Rate
  • High International Usage
  • High Mobility / High Sphere
  • Medium WAP Usage/ High Voice Mail/VAS Utilization
  • Weekday Intra_week Pattern
  • Saturday Night-life Pattern
  • Sunday Night-life Pattern
  • Overall High Usage
  • High Proportional Usage in

Low Rate

  • High Proportional 011 Call
  • High Proportional Mobile Call

Usage

  • Very Long Call
  • Medium Sphere
  • High Area Concentration
  • Medium Mobility
  • High WAP/SMS Usage
  • High Voice Mail Utilization
  • Age (10’s & Early 20’s)
  • Overall Very Low Usage
  • Overall Very High CV
  • Very High Concentration
  • Very Low Mobility
  • Weekday Night Life Pattern

(No worker Pattern)

  • Saturday Daylight Activity Pattern
  • Overall Medium Usage
  • Low Mobility / Small Sphere
  • High Concentration in Numbers
  • High Proportional WAP Minutes
  • Low Percentage of Using VAS
  • Low Call Forwarding Utilization
  • Low Call Waiting Utilization
  • Age (Late 20s and 30s)
  • Weekday Worker Pattern
  • Daylight Activity Saturday Pattern
  • Overall Low Usage
  • High Proportional Usage in High Rate
  • High Proportional Low Call Usage
  • Short Call
  • Low Proportional Mobile Call
  • Low SMS Usage
  • Low WAP Minutes
  • Age (40’s & 50’s)
  • Weekday(75%), Weekend(25%)
  • Weekday : 9 to 5 Working Pattern
  • Saturday Daylight Activity Pattern
  • Overall Medium Usage
  • High Proportional Usage in High Rate
  • Medium WAP Usage
  • Medium SMS Usage
  • Weekend Intra_week Pattern
  • Saturday Night Activity Pattern
  • Overall Medium Usage/ Medium Call
  • High Proportional Usage in Medium Rate
  • High Proportional WAP Minutes
  • Low Sphere / Low Mobility
  • Low Usage of Call Forwarding
  • Very Similar to Segment 4

Except

  • Weekend Pattern
  • Longest Call
  • Age (10’s & Early 20’s)
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Segmentation Brands Power

Segment Brands & Target Marketing Since 1999

Segment Brands I ntroduction Segment Brands I ntroduction

‘99 ‘99

SKT (July) LGT (Feb.) KTF (May) SKT (Aug.) KTF (Aug.) SKT (Oct.) KTF (Oct.) LGT (July) SKT (Aug)

‘00 ‘00 ‘01 ‘01 ‘02 ‘02

– During 4 yrs. 10 of Segment Brands were

launched in Korea mobile market Segment Brand Performance Segment Brand Performance $ $ $ $ Young Generation Subscribers’ Demand & Satisfaction

21.0%

79.0% 57.6%

52.7% 48.4% 42.4% 48.4%

47.3% 51.6% 51.6%

  • Feb. 99 Early ‘00

Early ‘01

SKT KTF

Young Target Segment M/ S I ndex

Early ‘02 End of ‘02

  • II. Market Driven Factors
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Wireless Data Market Growth

 Newly Emerging Wireless Data Market I n Korea : New Demands? : Data

Seamless SVC Demand I ncrease (Ubiquitous Environment)

One Market, One Platform

Any Time Any Device Any Place High Mobility, High Bandwidth Upscale Service Needs

1

# Continuous Demanding Unlimited Communication &

I nformation Needs

Data Drive Telecommunication Service

3

# Moving From Voice To Data

0% 100% 46% 39% 2% 13% 42% 30% 7% 21%

2000 2005

Mobile voice Fixed voice Mobile data Fixed data Total Domestic Market Size U$21 Billion Total Domestic Market Size U$34 Billion

Biz Convergence as a Driving Force I n The Market

2

# Telecom.,Broadcasting, Finance, and Sales Channel are

being reformed and closely I ntegrated as a new value chain Cross-I ndustry I ntra-I CT I ntra- Communication

Broadcasting Finance Sales Channel Telecom.

  • II. Market Driven Factors
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Value Driven Structure Various Service Demands High Speed & Multifunction Convergence & Ubiquitous New Driven Future Market I I . Market Driven Factors I I . Market Driven Factors I I I . Market Paradigm Shift I I I . Market Paradigm Shift I . Mobile Market Situation I . Mobile Market Situation

Table of Contents

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Value Driven Structure

  • III. Market Paradigm Shift

 I ndustrial Convergence by Various Customers’ Needs, Technology I nfra

Development, and Government Policy & Support

Wired Life Style (Voice Driven Market) Wireless Life Style (Value Driven Communication)

I ndustry Convergence Market Globalization Ubiquitous Environment

Finance Computer Telecommunication Information Information Information Information Broadcasting Finance Computer Telecommunication I nformation Broadcasting

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Various Service Demands

  • Artificial Intelligence Service
  • Information Multicasting
  • UMS, Audio/Graphic/Video Mail
  • Location Service : Safety Service, Smart Yellow Page
  • VMT Service (Information Car Navigation, etc.)

Mobile I nformation Service E-Commerce Service (B to C, C to C)

  • Commerce Portal & Commerce Gateway
  • Electronic Money/Cyber Cash, Security
  • Virtual Shopping, Cyber Finance (Banking,Stocks,

Action, Insurance, etc.)

  • Voice/Digital Writer /Biometrics Application Service

Entertainment · Education Service

  • Virtual Campus, Virtual Studio, e-Book, Network Library
  • Internet Broadcasting , e-Music, MOD, VOD,

Network Game, Multimedia Kiosk

Home Networking, Regional Networking

  • Home Networking / Remote Control
  • Home Care, Tele Medicine

Platform Network

  • Cellular, IMT-2000
  • B-WLL
  • Home Network
  • Bluetooth etc.
  • Comm. I nfra

Terminal

Various Communication Service

E N A B L E R S E R V I C E

  • III. Market Paradigm Shift
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High Speed & Multifunction

32 64 9.6 128 144 384 2,000

1G 2G 3G

Voice Voice Text Messaging Text Messaging Video Streaming Video Streaming Still I maging Still I maging Audio Streaming Audio Streaming Data Transmission Speed - kbps

Electronic Newspaper Remote Medical Service (Medical image) Video Conference (High quality) Telephone (Voice) Voice Mail E-Mail Fax Electronic Publishing Video on Demand: Sports, News Weather Karaoke Video Conference (Lower quality) JPEG Still Photos Mobile Radio Video Surveillance, Video Mail, Travel I mage Audio Voice-driven Web Pages Streaming Audio Data Weather, Traffic, News, Sports, Stock updates Mobile TV E-Commerce

 Through Wired & Wireless Market Synergy Based on High Speed I nfra, Customers Will Be Satisfied and Enjoy End-Benefit I n Real Time.

  • III. Market Paradigm Shift
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Convergence &Ubiquitous

Multimedia Seamless Service

1G 2G 3G 4G

Mobile Person-to- person Person-to-machines Machines-to-machines

Voice

Phone Decoration, Bell Sounds Download SMS Messaging Video Telephony Mobile TV

VOD, Video Streaming Video Conferencing Sensing 3D Game Virtual Telecommunication Remote Medical/ Nursing 3D Game High Function Telematics

Voice Focus Low Speed’s Data 9.6kbps ~ 64kbps Multimedia Forward 2.4 Mbps Reverse 307kbps Average 600kbps Multimedia 384 Kbps ~ 2 Mbps

Ubiquitous Max 100Mbps

Average 20Mbps

AMPS(1984) CDMA(1996) 1xEV-DO(2002) WCDMA(2003) ?

Telematics LBS Application DAB/DVB

Providing Very High Speed Multimedia Services

Data

  • III. Market Paradigm Shift
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communication communication communication communication communication communication communication 16 Future Exotic Market

Communicat ion Content Computing

I nitial convergence

Content New Services Computin g

Expansion of Other I ndustries

Communi- cation Media Converged Communica tion

I ndustry Convergence Technology

Computing & Electronics Content

Driving Sports Shopping . . . Entertainment Game Education Dining Office Home Finance Factory

Converged Communication Biz.

uCommerce uComputing uCommuni- cation

Future Market Movement By Mobile Centered Convergence Environment

  • Customer

Needs

  • Digitalization

Customer Context S t a t e

  • O

f

  • T

h e

  • A

r t N e t w

  • r

k Mutual I nteraction

  • Mobile+ Internet Access
  • Smart Phone:

Handsets+ PDA

  • Telecom & Other Biz

Converged Services

  • Various Comm. Methodology’s Integration
  • Mmultifunction Terminal
  • Artificial Intelligence and Wearable Computing, etc.

Newly Driven Future Market

  • III. Market Paradigm Shift