Beyond Broadband Access

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1 Beyond Broadband Access Dr. Sanghoon Lee Executive Vice President

2 Agenda Broadband Internet in Korea Beyond Broadband Services Features and Directions Summary & Remarks

3 Broadband Internet Business in Korea (unit: thousands) 30,000 25,000 28,610 26,270 25,650 24,380 22, % 80.0% 20,000 15,000 10,000 5,000 3, % 9,430 19,040 16, % 38.5% 22.4% 3,870 2, % 6, % 58.0% 7,806 8, % 10,405 11, % 11, % 40.0% 20.0% % Thrunet Hanaro KT Internet Users Internet Users Population percentage Broadband Internet households ~73% of total households (ref:

4 Changing Life Style Phenomenal increase of broadband Internet usage (ref: isis.nic.or.kr) Weekly hours spent on Internet & TV % of daily Internet users 16.5 h TV Internet 14.1 h h 30.8% 71.9% 6.76 h 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 market Evolving into another type of entertainment area: game league

5 Two Sides of Broadband Internet Business in Korea Threat Revenue: Saturating market with flat rate Expenditure: Increasing CAPEX/OPEX due to doubling traffic High customer expectation level: - avr. ~4.5Mbps bandwidth per customer - customer sensitivity to network quality & Opportunity Has established - high quality infrastructure - Large customer base Opportunities in application & value-added services

6 The Way Broadband is Being Used Today Main Internet usages (%) Mainly used for best-effort, data/control/file-oriented, store-&-forward applications seldom used for high quality, interactive/ distributive media servic (%) Where people are using Internet today Today s broadband Internet service is limited to specific locations specific time of day specific terminal specific applications Home Work School PC café etc Should overcome these barriers to generate mass application market

7 Beyond Broadband Service From simple Internet access to quality life/work services Yesterday Today Tomorrow Any-Access Access Rich Contents Browsers P2P,Game HTTP FTP Web Pages Servers Wireline HTTP WAPVoIP WAP Wireless RTP RTSP

8 Beyond Broadband Service: Features Different business From access service to end-to-end service Both best-effort & quality service From network service to solution/application services Applications: from niche market to mass revenue market Different focus Ubiquity Convergence Bandwidth Handy Beyond broadband business Quality Current broadband access business Personalization

9 Bandwidth Evolving access bandwidth Past Present Future Fixed PSTN Modem ADSL ISDN VDSL FTTH 1-8Mbps 20~50Mbps 100+ Mbps Megapass TM : avr. ~4.5Mbps WLAN Mobile IEEE IEEE802.11b IEEE802.11a 1+ Mbps PCS (IS-95A) IS-95B 11Mbps per AP CDMA2000 1X 1X EV-DO 14.4 kbps 64 kbps 144 kbps 2.4 Mbps shared IEEE802.11g 54Mbps per AP 1X EV-DV W-CDMA (5GHz) (2.4GHz) 3.1Mbps shared 384+ kbps Portable Internet (2.3G) ~1Mbps per device (Megapass is an umbrella brand for KT s

10 Ubiquity Ubiquitous network connectivity Integrated connectivity with seamless mobility Cellular Network (IS-95, cdma2000 1x, etc.) 2.3GHz Portable Internet WLAN

11 Wireless LAN Service Nespot TM & Nespot Swing TM Nespot: Wireless LAN-based access service Nespot Swing: Both WLAN & Cellular service Hot Spot, Home KT Network Internet Access Point Internet + Voice Base Station 2.5G / 3G Network Outdoor Number of Nespot users Number of KT Hotspots

12 Portable Internet Service Portable Internet (PI) ~1Mbps speed, mobility > 60km/h, coverage 500m~3km Mobility: between WLAN and PI areas AAA Server Internet Backbone(Kornet TM ) MA: Mobile Agent (HA, FA <Legend> Telecom office #1 MA Telecom office #2 MA AP W-LAN(2.4GHz) AP W-LAN(2.4GHz) AP W-LAN(2.4GHz) Base Station PI (2.3GHz) PI (2.3GHz) Base Station Fixed or moving subscriber

13 QoS Basic tool for differentiated services from Telcos Issue LAN Home 100M ER T1 ER differing capabilities ER T1 OC3 CR T1 OC3 CR CR Standardized QoS & OC48 Security mechanism OC3 needed T1 ER B-RAS End-to-end B-RAS control: ER OC3 premise network beyond Telco s OC3 control CR adsl Evolution: Handling QoS-blind, QoS-weak equipments OC3 OC3 DSLAM 100M Complexity: Multiple vendor equipments with ME-S ME (MDF) 100M Enterprise Home Killer App ME-R ME (CO) 100M ME-R OC12 ME-R ME-S Home DSLAM RT Home DSLAM 100M adsl Home Enterprise

14 Personalization Features Personalized value-added & application services Site authentication personal authentication Single sign-on between network login and application login Customer profile-based network setup Dad Mom Daughter Son Access Auth Edge Service Control Platform Policy INTERNET AAA Server Customer Edge Node

15 Convergence Fixed & wireless OnePhone service Telecommunication & broadcasting Digital Home service (Broadband Internet + broadcasting + VoD) Telecommunication & finance K-Bank service DMB (Digital Multimedia Broadcast)

16 Handy Easily accessible service through various terminals Easy,simple, intuitive, consistent user interface From general purpose PC to appliance-type terminals Portable, carriable terminal vs.

17 The Next Generation Networks The following picture has been in place for more than 10 years Too costly, per-service network architecture Mobile Networks Services PSTN/ISDN Data/IP Networks CATV Single/simple/cost-effective network infrastructure for existing & new services Wireless Access Existing and newly emerging services Network control (QoS, Security, IP Mobility) Multi-Service IP Backbone Wireline Access Access Transport & Switching Networks

18 NGN: From Vision to Reality BcN Initiative in Korea high-quality broadband multimedia services integrating telecom, broadcasting, and Internet seamlessly at anywhere, anytime, and using any devices

19 Summary & Remarks Broadband business in Korea calls for new market Next generation broadband: different business & different network Networking capabilities for next generation services Broadband Convergence Network as an enabler Further considerations Deployment cost Services that pay off Regulatory issues

20 Thank You

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