Download - Company Presentation October 2000
Company Presentation
http://www.sktelecom.com
October 2000
2SK Telecom
Table of Contents
1.1. Market OverviewMarket Overview
2.2. Wireless data MarketWireless data Market
3.3. Issues & StrategyIssues & Strategy
4.4. Investment HighlightsInvestment Highlights
3SK Telecom
Table of Contents
Market OverviewMarket Overview
Wireless data MarketWireless data Market
Issues & StrategyIssues & Strategy
Investment HighlightsInvestment Highlights
4SK Telecom
Korean Cellular Penetration
[%]
Cellular Penetration surpassed Fixed line in Aug. 99
Cellular
Fixed line
0
10
20
30
40
50
60
1996.12 1997.12 1998.12 1999.12 2000.12E
5SK Telecom
(Unit: 1,000)
SKT & STI’s SubscribersSKT & STI’s Subscribers
3,238 3,4102,891
4,571
2,136
1,125290
10,83010,077
5,966
0
2000
4000
6000
8000
10000
12000
1996 1997 1998 1999 2000(E)
STI SKT
Cellular Market
14,644(56.4%)7,774(29.9%)
3,557 (13.7%)
SK Telecom&Shinsegi
LG Telecom
KT Freetel&KT M.com
As of Sep 30, 2000(thousand)
Market ShareMarket Share
6SK Telecom
Trend on Call Composition
30.031.9
36.740.3
34.5
16
10.0
34.0
47.453.1
55.5
42.0
29.320.7 16.9
0
20
40
60
80
100
Dec 1996 Dec 1997 Dec 1998 Dec 1999 June 2000
(%)
Incoming call from PSTNIncoming call from PSTN
Call between Mobile OperatorsCall between Mobile Operators
Outgoing to PSTNOutgoing to PSTN
The mobile is getting more The mobile is getting more independent from fixed linesindependent from fixed lines
Wireless displacing Fixed line
7SK Telecom
SK Telecom’s Cellular Subscriber Trend
10,45810,886
11,26911,933 11,819 11,552 11,313 11,165 11,072
2.8
4.1
2.2
1.5
3.0
2.3
3.0
2.8
2.2
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
Jan 00 Feb 00 Mar 00 Apr 00 May 00 Jun 00 Jul 00 Aug 00 Sep 00
0
1
2
3
4
5
Cellular churn rate
(000) (%)
8SK Telecom
SK Telecom’s ARPU Trend
(Won)
(*) Excluding Interconnection among Mobile operators
32,72530,235 31,224 31,542 32,891 31,912
2,660 2,987 4,091428
294
5,989 5,8736,026
5,8636,090
5,943 6,4566,379
6,180
31,310 30,587
31,390
3081,408
254
2,937
0
10,000
20,000
30,000
40,000
Jan 00 Feb 00 Mar 00 Apr 00 May 00 Jun 00 Jul 00 Aug 00 Sep 00
call charge& monthly fee sign up fee Intercon(*)
9SK Telecom
Minutes of usage taking off
(%)MOU(Min)
0
40
80
120
160
Sep 99 Oct 99 Nov 99 Jan 00 Feb 00 Mar 00 Apr 00 May 00 Jun 00 July 00
0
2
4
6
8
10
MOU Growth rate vs. previous year
10SK Telecom
Table of Contents
Market OverviewMarket Overview
Wireless data MarketWireless data Market
Issues & StrategyIssues & Strategy
Investment HighlightsInvestment Highlights
11SK Telecom
6,001
2,888
1,057
282
1999 2000(E) 2001(E) 2002(E)
Korean Internet/E-commerce market growth
(Unit: Billion won)
Korean E-commerce marketKorean E-commerce marketKorean Internet UsersKorean Internet Users
16,030
10,860
3,103
1,634731366
1995 1996 1997 1998 1999 07- '00
(Unit: 1,000)
Source: Ministry of Information & CommunicationSource: Ministry of Information & Communication Source: International Data CorporationSource: International Data Corporation
12SK Telecom
n.Top performance
Apr 00 May 00 Jun 00 July 00 Aug 00 Sep 00 Dec 00(E)
ARPU 1,727 1,964 2,397 2,402 2,614 2,710 3,000# of
contents974 1,169 1,615 1,995 2,578 2,879 4,000
(000)
2,172
3,3593,603 3,626
3,900
1,468
2,7493,141 3,200
2,244
1,891
2,552
3,038
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Apr 00 May 00 Jun 00 Jul 00 Aug 00 Sep 00 Dec 00 (E)
# of handsets # of users
13SK Telecom
n.Top Growth potential
6,867
5,058
3,200
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2000.12(E) 2001.12(E) 2002.12(E)
n.TOP Users
(000)
Mobile UsageMobile Usage
- Penetration levels - Penetration levels > 50%> 50%
- Rapid adoption of new - Rapid adoption of new technology by Korean consumers technology by Korean consumers
- Increased demand for information - Increased demand for information at “any time, any place” at “any time, any place”
Data UsageData Usage
- High PC penetration- High PC penetration
- Rapid internet growth- Rapid internet growth
- Subscriber group is growing - Subscriber group is growing youngeryounger
High growth potential in Korean wireless data market
14SK Telecom
•
• Humor, Short Stories, Horoscope
• Cyber Events, Horserace, Quiz, Lottery Info.
• Banking : Money transfer, balance check• Credit card balance check, Stock Trading/Quotes• E-Lottery, Insurance, Real estate• Reservation/Ticketing, Shopping Mall, Travel• Department Stores
InfoNet BizNet
EntertaiNet MyNet
• Email, Contacts, Scheduling, Anniversary• Cyber Customer Center
n.TOP Service
• Launched : 1 Dec.’99 • Delivery technologies : WAP and online SMS• Access to 6 networks• Close interface with Web page (www.n-top.com)
• Location (Gas station, Banks/ATMs)• News / Sports / Weather• n.TOP community - Bulletin Board • Movie / Theater / Video • Search / Dictionary• College Info.
•
• Picture mate, animation Downloading / Messaging
• Games (including interactive games)
• LoveLink, Fashion, Fan Clubs, Shopping Mall
TTL n.TOP
• Business Information (Jobs, Tax, etc.)
• Trade
• Mobile Intranet
Biz n.TOP
15SK Telecom
n.TOP Usage Pattern & Trend
Substantial increase in n.TOP WAP usage per subSubstantial increase in n.TOP WAP usage per sub
- Double the Online-SMS Transaction Volume- Double the Online-SMS Transaction Volume
- Majority of new users use WAP based n.TOP- Majority of new users use WAP based n.TOP
Content PreferenceContent Preference
TOP5TOP5
SMSCommunity
27%Humor 16% Word
Game14%Quiz&Gifts 8%
Loc. App. 6%
WAP
Picture Mate34%
Chatting 14%
Quiz Game 14%
News/Humor 7%
Casino 6%
16SK Telecom
Table of Contents
Market OverviewMarket Overview
Wireless data MarketWireless data Market
Issues & StrategyIssues & Strategy
Investment HighlightsInvestment Highlights
17SK Telecom
The company has to meet the government 50% market share conditions. We will undertake this task with careful consideration to company value.
Marketing Marketing related actionsrelated actions
Reduced the advertising on television and completely
stopped advertising on major newspapers
Much of the promotional services have been eliminated
1) suspended sales promotion for activation
2) reinforced the criteria for involuntary deactivation
3) abolished the installment payment system on initial
subscription fee.
Reinforce the involuntary deactivation criteria
Meeting FTC Conditions
18SK Telecom
The IS-95C investment is essential to accommodate rapid growth in demand The IS-95C investment is essential to accommodate rapid growth in demand for wireless data servicefor wireless data service..
Market Market ExpectationExpectation
Due to handset subsidy ban, the number of IS-95C service
users this year is expected to be rather low, but we expect
the number to grow to about a million by the end of next year.
IS-95C system will be as competitive as IMT-2000 service in
its data transmission speed by the time IMT-2000 service is
scheduled to start in May, 2002.
Until the broad adoption of IMT-2000 service which is expected at
2005 or beyond, IS-95C can be a stepping stones to 3G service.
Service Service Coverage PlanCoverage Plan
1st stage: 2000.10~12 23 cities in 7 major metropolitan area 2nd stage: 2001.7 56 cities in the country
3rd stage: 2002.1 all major highways
IS-95C Service Launch
19SK Telecom
Number of licenses expected is 3, and service starting date will be May,Number of licenses expected is 3, and service starting date will be May, 2002 2002
Forming a consortium was encouraged by the government. Forming a consortium was encouraged by the government.
No points for entities which apply for the licenses on their own.No points for entities which apply for the licenses on their own.
The consortium will be formed to minimize the dilution of the The consortium will be formed to minimize the dilution of the
company value.company value.
ConsortiumConsortium
Licensing Licensing scheduleschedule
Application : October 2000 Completion : December 2000
Technology Technology StandardStandard
The government wants at least one entity to adopt
CDMA2000 as the standard.
- Two Licenses for W-CDMA, one for CDMA 2000
The company wants W-CDMA platform.
Investment/IMT-2000
20SK Telecom
Total amount 30% and no limit on investment per investorTotal amount 30% and no limit on investment per investor....
The company intends to participate in the process.The company intends to participate in the process. In the second In the second
roundround
In the first roundIn the first round
SKT acquired 2% of the company stake at the price of 33,000 won per share
Investment Investment objectiveobjective
To make savings in leased line expense To assure price competitiveness in wireless internet business. To secure reliable and dedicated network for IMT-2000 and
wireless data service. To compliment and increase usage of our existing back bone structure
Our ultimate aim is to have a reliable access to fixed line network which will compliment our growing wireless business
Investment/Powercomm
21SK Telecom
Integration with Shinsegi
SK Telecom and Shinsegi will explore coordination and integration SK Telecom and Shinsegi will explore coordination and integration
opportunities to maximize synergiesopportunities to maximize synergies
Network Roaming
- Offer roaming service to STI subscribers in less populated areas by - Offer roaming service to STI subscribers in less populated areas by
reprogramming their handsets from September of this year.reprogramming their handsets from September of this year.
- From January 2001, SKT will start dismantling STI base stations. - From January 2001, SKT will start dismantling STI base stations.
Co-investment
- A single IS-95C infrastructure will be made between the two networks.- A single IS-95C infrastructure will be made between the two networks.
NetworkNetwork
MarketingMarketing
Marketing coordination for branding, tariffs, handset policy, wireless data service and cross-marketing will be implemented
OtherOtherHuman resources policy will be coordinated to maximize the use of talents in both companies
22SK Telecom
Table of Contents
Market OverviewMarket Overview
Wireless data MarketWireless data Market
Issues & StrategyIssues & Strategy
Investment HighlightsInvestment Highlights
23SK Telecom
Investment Highlights
Well positioned for wireless internet servicesWell positioned for wireless internet services
Successful launch of wireless data service and market segmentation Successful launch of wireless data service and market segmentation strategystrategy
Prior occupation for wireless data service by launching IS-95CPrior occupation for wireless data service by launching IS-95C
The pre-eminent wireless operatorThe pre-eminent wireless operator
# 1 brand image and call quality# 1 brand image and call quality
Highest quality subscriber (ARPU, MOU, Collection rate, etc)Highest quality subscriber (ARPU, MOU, Collection rate, etc)
Weakened competitive environmentWeakened competitive environment
Reduction in marketing expensesReduction in marketing expenses
Extensive synergies to be realized from acquisition of STIExtensive synergies to be realized from acquisition of STI