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Mobile Market in Korea

Mobile Market in Korea. Sung-Woon Cho, Ph. D. Telecommunications and Broadcasting Research Division. Ⅰ Telecommunication Market Overview. II Current Status of Mobile Market. III Wireless Broadband Internet. IV Conclusion. Contents. IT Industry Production : 241.1 Billion USD (2004).

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Mobile Market in Korea

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  1. Mobile Market in Korea Sung-Woon Cho, Ph. D. Telecommunications and Broadcasting Research Division

  2. ⅠTelecommunication Market Overview II CurrentStatusof Mobile Market IIIWireless Broadband Internet IVConclusion Contents

  3. IT Industry Production : 241.1 Billion USD (2004) Unit : 10 Thousand Subscriber 3,500 IT Industry Growth Rate : 17.5% (2004) 3,000 75% 80.5% 2,500 of population of Subscriber IT Equipment Production: 3rd Largest Country (US(1st), Japan(2nd)) 77% 49.3% 2,000 76.6% of population of population of households 1,500 IT Equipment export : 74.2 Billion USD (2004) 1,000 500 0 Wireline Wireless Sub. Internet User CDMA 2000-1x Broadband User Snapshot Overview

  4. Broadband Internet Mobile Communication Service Unit : Thousands Unit : Thousands Market Drivers Overview

  5. Broadband Wireless Internet Anytime, Anywhere Target market : Broadband wireless Internet Complementing mobility to broadband wireless LAN Lower cost & higher data speed than the mobile Internet Voice Wired Telephone Mobile Phone Mobile Internet Wired Wireless Broadband Internet (ADSL, VDSL, HFC) WiBro / HSDPA Broadband Wireless Internet Wireless LAN Data To the Next Step Overview

  6. Trends in Wireless Telecommunication Data speed improvement, more needs on interworking technology among wireless networks • IMT-2000(UMTS) : EVDO, R4 EVDV, R5, R6 • Wireless LAN : IEEE 802.11a/g 802.11n Evolution direction depends on the market demands, technology evolution • Data speed / Mobility improvement (VoIP) Mobility 250km/h WCDMA 1xEV-DO 3G ? 4G CDMA2000 2G 60km/h WiBro ? Walking Speed Wireless LAN Data Rate Fixed 1G 2M 10M 30M 100M bps 0.1M 1M To the Next Step Overview

  7. ⅠTelecommunication Market Overview II CurrentStatusof Mobile Market IIIWireless Broadband Internet IVConclusion

  8. AMPS CDMA IS-95 IS-95A IS-95B CDMA 2000 1x CDMA 2000 EV-DO WCDMA HSDPA WiBro Technology 05.10 06 84.5 96.1 97.10 98.6 99.8 99.10 00.10 01.5 02.1 02.2 02.3 03.12 30 mil. subscribers Entry of 3 PCS operators 10 mil. subscribers 20 mil. subscribers KTF, Hansol PCS M&A KTF-KTI, SKT-STI M&A 38 mil. subscribers Market Milestones Current Status

  9. Unit : %, Thousands 6,240 19,276 12,270 Unit : %, Thousands 5,467 18,148 11,538 Market Situation Current Status M/S in Mobile Comm. Market Market Shares Total M/S (2001~2005. 8) Unit : %, Thousands 24,435 30,762 33,029 35,624 37,787 Wireless Internet M/S (2002~2004) Unit : %, Thousands 31,431 29,085 35,016

  10. Sales Data Service Sales Unit : Million USD Unit : Million USD 2001 2002 2003 2004 2001 2002 2003 2004 KTF LGT SKT KTF LGT SKT 2001 2002 2003 2004 2001 2002 2003 2004 Total 570 1,226 1,736 2,424 Total 11,951 14,519 15,459 16,578 Data/ Total 4.8% 8.4% 11.2% 14.6% Growth rate - 21.5% 6.5% 7.2% Growth rate 115% 42% 40% - Market Situation Current Status

  11. Cellular & PCS band CDMA2000 1x EV-DO Subscribers (2005. 8) SKT 2000. 10 2002. 2 18,148,000 KTF 2001. 5 2002. 5 11,538,000 LGT 2001. 5 2002. 2/2 5,467,000 2GHz Band Standard License Service Launching SKT WCDMA 2001. 12 2003. 12. 29 KTF WCDMA 2001. 12 2003. 12. 29 LGT CDMA2000 2002. 5 - 3G Launching Current Status

  12. ⅠTelecommunication Market Overview IIIWireless Broadband Internet IVConclusion II CurrentStatusof Mobile Market

  13. Barriers to Overcome Mobile Internet : Limitations on data speed and tariff level • Main usage : Character and melody, etc. Wireless LAN : Limitations on the cell-coverage and portability (Hot-spot) • The convenient use for laptop computer users New wireless Internet service with high speed and mobility is needed at reasonable prices Needs in the Wireless Internet Contents Wireless Internet Content Usage Multimedia Contents 49.7 % Character/Melody 32.8 % File Transfer/Download 49.5 % Games 18.0 % E-Mail 34.9 % E-mail 11.8 % LBS 28.3 % LBS 6.3 % Reservation 25.5 % Multimedia Contents 6.1 % 24.4 % Games 4.9 % News Shopping/Advertisement 18.4 % 4.5 % Broadcasting/Sports Financial Service 14.0 % Financial Service 3.9 % Barriers to Overcome Wireless Broadband Internet

  14. Milestones for Commercialization Government announced the licensing rules of 2GHz IMT-2000 : July 2000 KTICOM and SKIMT received 3G (WCDMA) licenses : Dec. 2000 Government announced the detailed policies of IMT-2000 : June 2003 • WCDMA : Service launch by 2003, city areas by 2006 • CDMA2000 : Service launch by June 2006 Commercial service launch in Seoul metropolitan area : Dec. 2003 HSDPA service launch : 2006 WCDMA Launch 2001. 10 Japan 2003. 5 Austria 2003. 12 Korea 2004 France, Portugal, Spain, Germany 2003. 3 UK, Italy, Sweden 2004 Taiwan, Singapore, Hong Kong, Australia WCDMA Wireless Broadband Internet

  15. Terminals Samsung W120 : WCDMA + CDMA2000 1x EV-DO • World first asynchronous → synchronous handover • Data rate (Max) : Asynchronous - 384Kbps, Synchronous - 2.4Mbps Samsung & LG HSDPA : The first half in 2006 • Seoul and metropolitan areas : R3(KTF), R4(SKT) → HSDPA Service Positioning File Transfer VOD/MOD High D A T A R A T E WiBro Killer Contents MMS E-mail Network Game Download Game Shopping / Advertisement Instant Messenger( 512 kbps Web Surfing WCDMA Killer Contents Community Online Board Location information Ring Tone Background Image Video Telephony Banking / Stock trading SMS Low Data Size Low High Quality of Service WCDMA Wireless Broadband Internet

  16. Wireless Infra Fixed Infra BSC Mobile phone IWF Internet network MSC PDSN BSC Base Station WiBro IP Backbone Internet Protocol Gateway Router HA AAA Internet Protocol HA : Home Agent IP router Mobile WiBro Division of voice and data network • Needs for additional devices for IP linkage Slow transition to all-IP network Simple network structure based on all-IP • Access to IP backbone directly Improvement on spectrum efficiency by adopting OFDMA technology WiBro Wireless Broadband Internet

  17. Characteristics Data-Only Service • Voice service can be bundled with mobile phone Differentiation with mobile phone : Data speed improvement Differentiation with wireless LAN : Coverage extension (indoor → outdoor), mobility Section WLAN WiBro Mobile phone Data rates per subscriber Above1 Mbps DL 512Kbps ~ 3Mbps UL 128Kbps ~ 1Mbps 100kbps Walking Above 60km/h Up to 250km/h Mobility Handsets Desktop, Laptop, PDA Laptop, PDA, Cellular Cellular, some PDA Coverage Indoor (inside of building) Outdoor (center of city) Indoor and outdoor (national network) Contents Common, fixed internet contents Common, fixed Internet contents Exclusive contents Tariff Flat-rate Volume-rate + Flat-rate Volume-rate WiBro Wireless Broadband Internet

  18. Milestones for Commercialization The finalization for WiBro technical standard: 1st half of year 2004 The grant of license: Feb. 2005 The commercial service launch: 1st half of year 2006 Government’s Policy on WiBro 3 Operators acquired the license by beauty contest (SKT, KT, Hanaro) License fee will be 108-126 million US$ for 7 years (per license, 3% of total revenue) WiBro MVNO will be introduced around the end of 2009 when subscribers reach 5 million 2004 1st Half 2004 2nd Half 2005 1st Half 2005 2nd Half 2006 1st Half Technology Technical Standard (June 2004 ) Development of Commercial System Field Trial Test Service Schedule Grant of License (Feb. 2005 ) Trial Service in APEC (Nov. 2005) Pre- Commercial Service Commercial Service WiBro Wireless Broadband Internet

  19. Expected Market Size Expected number of subscribers : 8 ~ 11 million subscribers in 2011 Prospect of sales : Maximum 3.2bn ~ 3.7bn US$ after 6 years from service launch • Depending on competition with emerging services : WCDMA, DMB MetropolitanArea Roll Out Network will be established focusing on urban area where the demand for data service is high • National coverage : Around 2009 Incheon Daejeon Daegu Ulsan Gwangju Busan WiBro Wireless Broadband Internet

  20. ⅠTelecommunication Market Overview II CurrentStatusof Mobile Market IIIWireless Broadband Internet IVConclusion

  21. Conclusion Korea plans to continue the success of “Broadband Korea” in the wireless domain WCDMA deployment is slow due to close substitutes (EV-DO) in cellular & PCS bands The speed & tariff of EV-DO are not enough to boost mobile Internet demands HSDPA & WiBro are expected to create broadband wireless Internet market The standardization of WiBro will strengthen the global competitiveness of Korea 2006 will be a landmark year for establishing the stepping stone of 4G Conclusion

  22. KOREA INFORMATION STRATEGY DEVELOPMENT INSTITUTE Thank You!

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