March 19, 2002
Seyong RoVice President,
New Service Development Division
Wireless Internet,Today & Tomorrow
2/18
Table of Content
1. Korean Market
2. Our Strategy - Openness - Multimedia
Platform 3. m-Commerce
Initiatives
3/18
Source: OECD (March ’00)
Internet & Wireless Penetration (%)
0
5
10
15
20
25
0 10 20 30 40 50 60 70
Wireless
Inte
rnet
Japan
Korea
United States
Sweden
Finland
Austrailia
Austria
Belgium
Canada
Czech Republic
Denmark
France
Germany
GreeceHungary
Iceland
IrelandItaly
Mexico
Netherland
New Zealand
Norway
Portugal
Spain
United Kingdom
1. Korean MarketLight speed growth both in internet & wireless
4/18
1) Portion of non-voice revenue among total wireless revenue(1H ‘01)
2) Includes i-SMS access
# of wireless subscribers
(000)
# of wirelessweb access
(000)
% of wireless data revenue 1)
Japan 67,537 49,438 (73.2%)
16% (DoCoMo)
Korea 29,235 24,284 (83.1%) 2)
11% (LGT)
In wireless, Korea soon to become more than an “another i-mode” miracle
(As of Jan ‘02)
Comparison with Japan
5/18
357
P2P SMS
Others
2000 2001
Wireless DataRevenue # of WAP Phones
WAP PhonePenetration
ActiveUsers*(40%)
(100 Million Won) (% to total subs.)
Striving to excel in wireless data
WirelessInternet
432
74
511
221
257
62% ↑172
650
68% ↑
54%
197% ↑
LGT Wireless Data Performance
48
100%
1,300
68%
1,900
2000 2001 2000 2001
3,190
◀
(Thousand)
* Subscribers who access to wireless internet at least once per month
6/18
Reason for NOT using (%)
No need20%
Difficult to use3%
Not aware13%
No handset29%
Expensive30%
Nothing attractive
3%
Reason for STOP using (%)
Expensive49%No need
14%
Slow17%
Others
1%
Nothingattractive
5%Unstable
connection11%
No fun3%
However, current wireless internet services are not enough to satisfymass customers.
Source: Yonsei University Research (Aug. ’01)
7/18
Even for early adopters, most of the wireless internet services are not yet positioned as killer services in everyday life.
Event of Use (%)
Revenue by Contents(%, Jan. ‘02)
12%
1%
1%
2%
3%
4%
5%
6%
27%
39%
Others
Other Info. needed
Stock Info. needed
In vehicle
Lunch time
Sleepless
Frequently
Urgent e-mail
During break
When nothing else to do Others
Stocks/Banking
Chatting/Community
Entertainment
Ring tones& Character D/L
Mail & Messaging
39
13
11
7
5
6LBS/Traffic
Games13
6
Source: Yonsei University Research (Aug. ’01), LGT Analysis
8/18
EVDV
So far, so good,•Explosive wireless growth•Dot-com fever•Aggressive marketing by carriers
But how long will it last ?
Time
What does it take to cross the chasm ?
Wireless Internet
IS95A/B 1X, EVDO
9/18
2. Our Strategy
MultimediaPlatform
Openness&
Standard
• Enhanced Wireless Internet Platform• Handset-independent Client Software• Java based
• Direct path to any URL• Open Portal / Menu• Open Access (IWF*)• Support Personal / Unofficial Sites
- No longer a “Walled Garden”, but “Traffic Maximization”- Focus on Multimedia Platform
* IWF (Inter Working Function)
10/18
LGTSubs.
LGT-NW
LGT-GW
YahooDaum
LGTSubs.
LGT-NW
LGT-GW
ez-i
Contents Provider
Open Access
Open Portal
• Allow access to LGT IWF • Competition between G/W owners
• Allow access to LGT G/W• Competition between Portal owners
ez-iYahoo
LGTSubs.
LGT-NW
LGT-GW
EXAMPLE
DACO
M-G
W
Megapass
Yahoo
Daum
Daum
Chollian
Walled GardenChollian
KT-
GW
Our Strategy – Breaking the walls
ez-i
- Open portal already in place (Daum, Chollian, Yahoo, etc)- Open access tested with Dacom. Soon to be opened to MISPs and commercialized (Q1 ’02)
11/18
Multimedia will be a next big thing along with evolution of wireless network
Our Strategy –Enhanced Multimedia Platform
Mobile Multimedia Potential
Customer Needs A little bit of Proof
• Graphic/Multimedia UI
• Video On Demand
• Audio On Demand
• Multimedia Messaging
• Mobile TV …
95 A/B CDMA 2000-1X
230%
(Wireless Internet ARPU*, Index)
100
330
* Jan. ’02 result
12/18
ContentProvider
•Ease of contents sourcing •Ease of handset supply•Increase in wireless data usage
Carrier
User
•Open environment - Ease of development - Less resource required - Time to market
•Fun @ low-cost•Variety of attractive contents•Improved user interface (GUI)
Java is a possible win-win solution for users & industry participants
13/18
Q3 Q4
2001 2002
Q1 Q2 3Q Q4
2000
Q2Q1Q4
Kitty-hawk
MIDP
EnhancedWI Platform
(JINOSTM)Platform
Java WAP browserBrowser UP WAP browser
LGT Wireless Internet Platform Roadmap
14/18
Java VM
Advanced Architecture
•A platform fully integrated into user handsets•Passed TCK* test & supports International Standard (J2ME CLDC MIDP)•Developed by LG Telecom & Veloxsoft
Phone HW
WAPSMS PIMSOther
…Apps
MainUI
Phone HW
Phone OS
JavaVM
WAP
JavaApplets
SMS PIMSOther
…Apps
MainUI
Phone OS
• Java-based SW environment• Full integration of Java into handset• Dynamic upgrade capability
LGT’s New Platform Architecture
Traditional Architecture
• Java as one of the native applications• Limited access to phone features• Most applications remain difficult to
port * TCK (Technology Compatibility Kit)
15/18
- Optimized run-time environment for any java applications/contents- Nearly everything is DOWNLOADABLE !!! (skin, browser, MMS player, game, any operators’ standard UI, PIMS, etc…)
MIDP
KVM & CLDC
H/W Specific Device Drivers
Hardware
OS, Protocols, Standards, …
LGT Profile
Common H/WDevice Drivers
Mobile SUITS Profile Native Application/API
Mobile SUITSDevice Driver Standard
Java Application
Java RuntimeEnvironment
NativeSoftware Layer
Device DriverLayer
MainUI
WAPBrowser
Games PIMS
Handset Manufacturer
End-User
LGT&
ThirdParty
Contents Provider
OTADownload
OTADownload
OTA* Download
Why New Platform ?
* OTA (Over The Air)
16/18
Java Contents - Examples
OK UP
<JAVA Station>1. Game 2. Comics3. Novels4. E-Mail/News5. Maps6. Instant Messenger7. Notice
Friendly UI* & Greater fun
* UI (User Interface)
17/18
Java Economics
User
Improved economics for users & carrier
Source: LGT simulation
38%KRW 53
JavaMail
WAPMail
KRW 33
LG TeleCom
83%KRW 89
JavaMail
KRW 15WAPMail
- Affordable Price (Game example) . Standalone Daily Use $0.2 ~ 0.4
Monthly $1.5 ~ 2.3Ownership $2.3 ~ 3.8
. Network(MUG) Monthly $0.8 ~ 2.3
- Improved Economics (Mail example) . Reading a mail (300 characters)
. Writing/Sending a mail (20 characters)
76%
Average Wireless
internet UserActive Java
User
$2.9
$5.1
Higher Data ARPU
18/18
mFinance
mPayment
News e-mail Game LBS Downloads ….
RF Proximity Payment
(ez Pass) On-Line Payment Vending Machine M Plus Card P/G1
IrDA Payment One-Chip (UIM) e-Cash Integrated billing Credit Card
EBPP2
…
1: Payment Gateway2: Electronic Bill Presentment and Payment3: Person to Person
mMarketplace
Stock Banking P2P3
PFMS Asset Managmt …
Ticketing Shopping Auction Price Comparison Advertisement Coupon ……
Currently running
To be launched in Q1’ 02
mInfortainment
3. m-Commerce Initiatives•Infotainment and Marketplace seen as in traditional portal business. •New business development focuses on “Mobile Payment” area.
19/18
2000 ~ 20012002
1H 2H2003~
PaymentService
PaymentInfra
CAT(Partnership)
Contact
Utilizing current handsets (offline/online/mobile)
OtherInfra
WPKI
(Dacom Partnership)
Khai Membership Coupon Business
AuthenticationSystem
Barcode server
UIM
m wallet (server)
Combi (Contact + contactless)
• Traffic Card• On-Line Payment• M Plus Card• Vending Machine
IrDA Phone Offline oriented, online/mobile capable
Mobile ad media rep.Ad server
2002 m-Payment Roadmap
M-P/G System
www.lgtel.co.kr
Thank you
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