Beyond Broadband AccessBeyond Broadband Access

Dr. Sanghoon LeeExecutive Vice President

-- 22 --

Agenda

Broadband Internet in Korea

Beyond Broadband Services

Features and Directions

Summary & Remarks

Agenda

-- 33 --

Broadband Internet Business in Korea

Broadband Internet in K

orea

3,103

9,430

16,400

19,040

22,230

24,38025,650 26,270

2,2743,870

6,2517,806

8,71710,405

7.4%

22.4%

38.5%44.7%

51.6%56.6% 58.0% 59.4%

0

5,000

10,000

15,000

20,000

25,000

30,000

1998.12 1999.10 2000.8 2000.12 2001.6 2001.12 2002.6 2002.120.0%

20.0%

40.0%

60.0%

80.0%

100.0%

1998. 7Thrunet

Internet Users

Broadband Internet householdsInternet Users Population percentage

1999. 4Hanaro

1999. 6KT

(unit: thousands)

(ref: www.krnic.or.kr)

28,610

11,103

64.1%

2003.6 2003.12

11,180

~73% of total~73% of totalhouseholdshouseholds

-- 44 --

Changing Life Style

14.1 h13.47 h

6.76 h

16.5 h

Weekly hours spent on Internet & TV

Internet

TV

% of daily Internet users

71.9%

30.8%

2000.3 2002.12

Phenomenal increase of broadband Internet usage

2000.3 2002.12

(ref: isis.nic.or.kr)

• On-line banking: More than 30% of total transactions

• On-line stock trading: More than 50% of total transactions

• e-Commerce: 17% of total commerce transactions

• On-line gaming: Market size 2.5 times the size of console game marketEvolving into another type of entertainment area: game league

Broadband Internet in K

orea

-- 55 --

Two Sides of Broadband InternetBusiness in Korea

Threat Opportunity&&Revenue: Saturating market with flat rateExpenditure: Increasing CAPEX/OPEX

due to doubling trafficHigh customer expectation level:- avr. ~4.5Mbps bandwidth per customer- customer sensitivity to network quality

Has established- high quality infrastructure- Large customer baseOpportunities in application& value-added services

-- 66 --

The Way Broadband is Being Used Today

0

10

20

30

40

50

60

70

80

info

rmat

ion;

sea

rch

emai

l

shop

ping

; res

erva

tion

chat

ting

gam

e

Inte

rnet

pho

neba

nkin

ged

ucat

ion

ente

rtain

men

tco

mm

unity

new

s; m

agaz

ine

mis

c

(ref: isis.nic.or.kr, Jul. 2003)

(%) Mainly used for best-effort,data/control/file-oriented,store-&-forward applications• seldom used for high

quality, interactive/distributive media service

0

10

20

30

40

50

60

70

80

Home Work School PC café etc

2001.122002.122003.12

Main Internet usages

Where people are using Internet today

(%)

Today’s broadband Internetservice is limited to• specific locations• specific time of day• specific terminal• specific applications

Should overcome thesebarriers to generate mass

application market

Beyond B

roadband Services

-- 77 --

Beyond Broadband Service

From simple Internet access to “quality life/work services”

BrowsersBrowsers Web PagesWeb Pages

HTTPHTTPFTP FTP ……

Any-AccessAnyAny--AccessAccess

HTTPHTTP

RTSPRTSPVoIPVoIPWAPWAPRTPRTP

Wireline

Wireless

Tomorrow

Rich ContentsRich ContentRich Contentss

P2P,GameP2P,Game ServersServers

TodayYesterday

Beyond B

roadband Services

-- 88 --

Different businessFrom access service to end-to-end serviceBoth best-effort & quality serviceFrom network service to solution/application servicesApplications: from niche market to mass revenue market

Beyond Broadband Service: Features

Ubiquity

Personalization

Convergence

QualityHandy

Current broadband“access” business

Bandwidth

Different focus

Beyondbroadbandbusiness

Features and Directions

-- 99 --

PortableInternet(2.3G)

~1Mbpsper device

Bandwidth

Past Present Future

14.4 kbps 64 kbps 144 kbps 2.4 Mbpsshared 384+ kbps

3.1Mbpsshared

Mobile

PCS(IS-95A) IS-95B 1X EV-DOCDMA2000

1X 1X EV-DV

W-CDMA

Evolving access bandwidth

Fixed PSTN Modem ADSL

ISDN

VDSL FTTH1-8Mbps 20~50Mbps 100+ Mbps

MegapassTM: avr. ~4.5Mbps

(Megapass is an umbrella brand for KT’sbroadband Internet service)

WLANIEEE802.11 IEEE802.11b IEEE802.11a

IEEE802.11g11Mbpsper AP

1+ Mbps

(5GHz)

54Mbpsper AP

(2.4GHz)

Features and Directions

-- 1010 --

Ubiquity

WLAN

Cellular Network (IS-95, cdma2000 1x, etc.)2.3GHz Portable Internet

Ubiquitous network connectivityIntegrated connectivity with seamless mobility

Features and Directions

-- 1111 --

Wireless LAN Service

BaseStation

AccessPoint

OutdoorHot Spot, Home

2.5G / 3G NetworkKT Network

Internet Internet +

Voice

NespotTM & Nespot SwingTM

Nespot: Wireless LAN-based access serviceNespot Swing: Both WLAN & Cellular service

0

50000

100000

150000

200000

250000

300000

350000

400000

2003.3 2003.6 2003.11 2004.3

Number of Nespot users

0

2000

4000

6000

8000

10000

12000

2002.12 2003.12

Number of KT Hotspots

Features and Directions

-- 1212 --

Portable Internet Service

MA: Mobile Agent (HA, FA)

PI (2.3GHz)Base Station

MATelecom office #1MATelecom office #2

AAA ServerInternet Backbone(KornetTM)

AP

PI (2.3GHz)Base Station

Fixed or movingsubscriber

W-LAN(2.4GHz)AP

W-LAN(2.4GHz)

<Legend>

AP

W-LAN(2.4GHz)

Portable Internet (PI)~1Mbps speed, mobility > 60km/h, coverage 500m~3kmMobility: between WLAN and PI areas

Features and Directions

-- 1313 --… T1

T1

ER

CR…

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OC3

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B-RAS

…

… OC3adsl

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…

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100M

GE

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ME-S

ME-R

OC12 B-RAS

…

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GE…

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GE

ER

ME-S

ME-R

OC3

OC3

GE

… …100M

ME-R

…

ME (CO)ME (MDF)

…

…

……

GE

GE

100M

GE

GE

100MLANCR

CR

CR

DSLAM DSLAM

DSLAM Enterprise Enterprise

Home Home

Home Home

RT GE

Home

… T1

T1

ER

CR…

T1

OC3OC48

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B-RAS

…

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ME-S

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… …100M

ME-R

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ME (CO)ME (MDF)

…

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GE

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100MLANCR

CR

CR

DSLAM DSLAM

DSLAM Enterprise Enterprise

Home Home

Home Home

RT GE

Home

QoS

Basic tool for differentiated services from Telcos

Standardized QoS & Security mechanism needed

End-to-end control: premise network beyond Telco’s control

Evolution: Handling QoS-blind, QoS-weak equipments

Killer App

Issue

Complexity: Multiple vendor equipments withdiffering capabilities

Features and Directions

-- 1414 --

Personalization

Customer Edge Node

INTERNET

Edge ServiceControl Platform

AAA ServerAccess

Auth

Policy

Dad Mom

Daughter

Son

FeaturesPersonalized value-added & application servicesSite authentication personal authenticationSingle sign-on between network login and application loginCustomer profile-based network setup

Features and Directions

-- 1515 --

Convergence

Fixed & wireless Telecommunication & broadcasting

Telecommunication &finance

DMB(DigitalMultimediaBroadcast)

OnePhone service

K-Bank service

Digital Home service(Broadband Internet + broadcasting + VoD)

Features and Directions

-- 1616 --

Handy

Easily accessible service through various terminalsEasy ,simple, intuitive, consistent user interfaceFrom general purpose PC to appliance-type terminalsPortable, carriable terminal

vs.

Features and Directions

-- 1717 --

The Next Generation Networks

The following picture has been in place for more than 10 years

ServicesServicesD

ata/

IP N

etw

orks

Dat

a/IP

Net

wor

ks

Mob

ile N

etw

orks

Mob

ile N

etw

orks

PSTN

/ISD

NPS

TN/IS

DN

CA

TVC

ATV

Access Transport & Switching NetworksAccess Transport & Switching Networks

WirelessAccess

WirelessAccess

WirelineAccess

WirelineAccess

Multi-Service IP Backbone

Existing and newlyemerging services

Network control (QoS, Security, IP Mobility)

Too costly, per-service network architecture

Single/simple/cost-effective network infrastructure for existing & new services

Features and Directions

-- 1818 --

NGN: From Vision to Reality

high-quality broadband multimedia services integratingtelecom, broadcasting, and Internet seamlessly at anywhere,anytime, and using any devices

BcN Initiative in Korea

Features and Directions

-- 1919 --

Summary & Remarks

Broadband business in Korea calls for new marketNext generation broadband:

different business & different networkNetworking capabilities for next generation servicesBroadband Convergence Network as an enabler

Further considerationsDeployment costServices that pay offRegulatory issues

Summ

ary & R

emarks

-- 2020 --

Thank You