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To: Eric L who wrote (2184)	4/5/2002 11:56:24 AM
From: elmatador	Read Replies (1) \| Respond to of 9255

What if (after the delays) everyone starts building 3G all at once? Not a GSM ten year period starting from the Europe and then spreading elsewhere. I mean every implementation going on everywhere all at once? It is very likely, Eric. It is not so far fetched. If we think that no one is going to risk the competition going into service with a head start.

To: Eric L who wrote (2184)	4/8/2002 10:07:53 AM
From: Eric L	Read Replies (1) \| Respond to of 9255

re: SK Telecom & 2.5G/3G CDMA Services Below is an abstract of the slides used by Moonsoo Pyo, President and CEO of SK Telecom when he recently made to the Merrill Lynch Global Communications Conference: sktelecom.co.kr I find this set of statistics most interesting: * Wireless Internet ARPU by Handset type - 2G Non-Color $1,60 USD - 2.5G Non-Color $3.40 USD - 2.5G Color $6.30 USD The above statistics and a review of SKT's services indicate to me that the success of 1xRTT "Data" at SKT and in Korea is due to a combination of factors (not necessarrily in this order): --> 1xRTT data transmission speed --> "Always On" packet-switched data connection --> Color handsets --> Color microbrowser (based on WAP 2.0) --> Other "data oriented" functions in handset OS (SKT's GVM) & UI --> Steadily increasing Content (including color content) --> Strong development communitty --> Java (SKT) or BREW (KTF) Content --> Refined market segmentation and new service offerings (SKT's TING & UTO) --> Integrated multi-interface Internet Portal Offering (SKT's NATE) Slides 9 & 10 deal with 2.5G. It should be noted that SKT classifies both IS-95A introduced in January 1996 and IS-95B introduced in August 1999 as 2.5G. This in contrast to Sprint PCS (and others) in the United States, who call IS-95B (which they don't use) 2.5G and cdma2000 1xRTT Release 0, 3G. Evidently Sprint PCS read Dr. Jacobs letter to the Koreans and SKT ignored it. >> SK Telecom: Moving Towards Next Generation Wireless * Snapshot of SK Telecom * Slide 4: A Snapshot of SK Telecom * Leading Korean wireless operator with 16 million subscribers * 52% market share in Korea and 58% revenue share * One of the global leaders in wireless Internet with 4.4 million 2.5G subscribers * As of February 2002: - Listed on NYSE and KSE with market cap of US$ 20 billion - Second largest Korean company in terms of market capitalization Slide 5: A Quick History of SKT * Mar 1984 - Business established * Jan 1996 - World’s first commercial CDMA cellular service launched * Oct 1999 - Handset based wireless Internet service (n. Top) launched * Apr 2000 - Shinsegi Telecom acquired * Oct 2000 - World’s first commercial CDMA 1x service launched * Dec 2000 - 3G (W-CDMA) license awarded * Oct 2001 Integrated multi-interface Internet portal (NATE) launched * Feb 2002 - 1x EV- DO service launched Slide 6: Robust Financial Robust Financial Performance * Revenue increased +9% in 2001 from $4.4 bn to $4.8 bn * EBITDA increased +25% from $2.0 bn to $2.5 bn and EBITDA Margin increased 9 ppts from 44% to 53% * Year-End ARPU increased +14% from $32.5 to $37.1 primarily as a result of increased development of data services and content to support 1xRTT and newly introduced color handsets. * Unique Merits of the Korean Wireless Market * Slide 8: Unique Merits of the Korean Wireless Market * Market consolidated from 5 to 3 players: Limited competition * 61% penetration as of December 2001 (Forecasted 79% penetration in 2005) * ARPU steadily growing * Prepaid almost non-existent: 0.5% of total subscribers * Relatively low 3G license fees : 25% level of European telcos * Customers extremely receptive to new technology * Technology leadership Slide 8: Korean Consumers are Technology Friendly * Fixed Broadband Penetration per household remarkably increased in Korea from 5% in Q1 2000 to 55% in Q4 2001 * SKT’s 2.5G (1xRTT) Penetration of SKT's subscriber base increased from 5% in July 2001 to 21% in Q4. * Color handsets were <1% of SKT's user base in July and August, 1% in September, 2% in October, 3% in November, and 4% in December. Slide 9: 2.5G Services Uptake Bodes Well for the Future * 2.5G Penetration (1xRTT) Penetration is forecasted to increase from 21% of SKT's total subs to 60% * Penetration of color handsets are forecast to 28% of the user base by end of 2002 * Wireless Internet ARPU by Handset type - 2G Non-Color $1,60 USD - 2.5G Non-Color $3.40 USD - 2.5G Color $6.30 USD Slide 11: Technology Leadership * SKT "CDMA" Migration Path Generation Standard Introduced Data Speed - 2G IS-95A January 1996 9.6 kbps - 2G IS-95B August 1999 64 kbps - 2.5G 1xRTT October 2000 144 kbps - 3G 1xEV-DO February 2000 2.4 Mbps - 3G W-CDMA 2003 Onward ¦ R99 384 kbps ¦ R4 2 Mbps ¦ R5 10 Mbps * Capex per Sub IS-95A/B 1xRTT 1xEV-DO W-CDMA $300 $150 to 200 $20 TBD Slide 12: EV-DO Handset Roll-out Plan on Track * Testing underway * Expected number of major vendors: 7 * EV- DO phones are color, have 40 polyphonic tones and video enabled * Introduce EV-DO Services - Feb 2002: Notebook PCMCIA Card for Notebook PC - May 2002: Non-VOD Handset with 65K Color STN LCD and Camera * Drive EV-DO Penetration - Jun 2002: VOD Handset with 260K Color TFT LCD and Camera - Aug 2002: Ultra Videophone with Enhanced Display and Large Memory * Wireless Internet Strategy * Slide 14: Wireless Internet Usage Patterns Accesses User Internet Revenue User Type Mix Per month Mix Trial 75% 1-9x 43% Active 19% 10-29x 31% Heavy 6% >30x 26% Slide 15: Market Segmentation Refined Segmentation Structure * Old Structure -- Kids and ages 13 to 24 served by "TTL" -- Middle aged and fully mature "silver" citizens served by "SPEED 011" -- Ages 25 ~ 35 served by combining "TTL" & "SPEED 011" * New Structure -- Kids -- New Junior product "TING" -- "TTL" retained & refined for ages 18-24 -- New Young Adult product "UTO" -- "SPEED 011" retained for middle aged and "silver" citizens. -- "Housewife" offering within "SPEED 011" * New Products ¦ "TING" -- Target age 13~ 18 (launched Aug 01) -- Low penetration (31% as of Mar 01) -- Future wireless internet users ¦ "UTO" -- Target age: 25~ 35 (launched Oct 01) -- Lock in high ARPU users -- Induce churn- in of competitors ’ subs -- Active users with high buying power * Multi-Platform Model * Slide 18: "NATE" Multi-Platform Model * Multi- Device Integration for a Single point of entry to the Internet ¦ Mobile Platform -- Handset -- PDA -- VMT (Vehichle Mounted Terminal) ¦ Fixed Platform -- PC -- TV -- Home Appliance Slide 19: Evolution of Multi-Platform Services ¦ Service evolution and SKT focus areas for 2002 * Evolution of Multi-Platform Services -- Voice Telephony and Text Messaging to Audio & Video Streaming Slide 20: "NATE" on Handset ¦ From basic applications to high-powered multimedia services * NATE Wizard -- Support GVM/JAVA Application Download - Games /Stock Quotes/Chatting/e-Book * NATE Air (Mobile broadcasting) -- 9 Channels of News/ Movies /Adult Fashion/Comedy/Music/English * Coupack (Mobile Couponing) -- Discount Coupons:Over 75 Products - Supermarkets/Department Stores * NATE Drive (Location Based Service) -- Map/Local Information/Friend Finder/Path Finder * Mobile Ad (Mobile Advertising) -- Localized Ads/Personalized Ads Slide 21: "NATE" on PC ¦ Closely linked to the wireless Internet * General Offerings • Mail • My NATE • Community • Messaging • Life • Entertainment • Money • Shopping * NATE Photo Portal • Photo Mail • Photo Printing • Photo Album * My PC • PC- Phone Sync Service • PIMS (Personal Information Management Service) • e-mail Management * Content Mall • Ring Tone & Picture Download to Mobile Phone Slide 22: "NATE" on PDA (Launched in November 2001) ¦ Recreates PC based Internet environment anytime, anywhere * Wireless Service -- Transforms the standalone PDA into a full-featured communications device * Full Functionality -- Improved user interface for heavy users Slide 23: "NATE"on VMT (Vehichle Mounted Terminal) ¦ Total transportation and related information for life on the go - Navigation Search - Convenience - Information - Favorites - Emergency - Services - Real Time Traffic - Information * Financial Enabler Model * Slide 25: The Financial Enabler Model * SKT’s Resources - Customer Base (16 mm Subscribers) - Brand (# 1 Market Position) - Multi- Platform Access (NATE) * Financial Enabler Business ¦ PAYMENT SERVICES - Petty Cash Settlement - Person to Person - MONETA Card ¦ FINANCIAL PORTAL - Billing and Payment - Bank Account Management - Personal Asset Management Advice - Information / Community * Benefits to SKT ¦ Transaction Fee ¦ Payment Fee ¦ Revenue Sharing with Financial Institutions Slide 26: Financial Enabler Services: Example (VISA MONETA IC Card) ¦ Lock in customers and leverage our subscriber base for M-Commerce ¦ Low risk strategic alliances involving no equity investment ¦ Win- Win for Customers & SK Telecom Win for Customers & SK Telecom * MONETA Card ¦ Currently, an IC chip installed multi- function credit card - Credit Card - e- Money - Transportation - Membership ¦ Will evolve into IC chip installed handsets ¦ Customer incentive and cost- effective marketing tool - Credit card partners provide up-front credit up to US$ 150 for handset purchase Slide 27: Prospects for Wireless Internet * 2001 - $228 mm: 5% of Total Revenue * 2005 - $3 bn: 20% of Total Revenue * 2001 to 2005 - CAGR of 90% << ### - Eric -