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A Korean Cellular Industry Perspective


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  • 1. CONFIDENTIAL Perspectives of DMB from Korean Cellular Industry - In the View of Convergence - Dr. Jongtae Ihm September 2005 SK Telecom 1
  • 2. Contents I SKT Overview II Converged Service Status III SKT’s Standpoint IV Perspectives V Conclusion 2
  • 3. I. SKT Overview Historical Highlight, Vision and Mission SK Telecom has always been the leader and pioneer of Korean Mobile Telecommunication market for the last twenty years, introducing numerous World’s First Services Korea Mobile Telecom Service Co.,Ltd, Mar 1984 established Vision SK Group became the major shareholder of Jun 1994 Korea Mobile Telecom Most Valuable Company with Innovation Jan 1996 Launched commercial CDMA cellular service* Mission Oct 2000 Launched CDMA 2000 1xRTT (2.5G) service*  Ubiquitous Partnership Jan 2002 Completed acquisition of Shinsegi Telecom  Value-Creating Innovation Inc. (STI)  Customer Oriented Service Feb 2002 Launched CDMA 1x EV-DO (3G) service *  Global Leadership Dec 2003 Launched WCDMA (3G) service Market Status Jul 2004 Launched Satellite for Mobile DMB Service  Market Share : 51.1%  Total ARPU : USD 42.2 Dec 2005 HSDPA(1.8M/384K) Installation - 16 Cities  Data ARPU : USD 9.38 1Q2005 World’s First* 3
  • 4. I. SKT Overview Wireless Data Business Status From “n.TOP”, SK Telecom’s first Wireless Data service launched in Oct. 1999, SK Telecom has been evolving into “NATE” and “June” to offer enhanced multi-media, multi-device services IS-95A/B cdma2000-1x 1x EV-DO n.Top ’99.04. ’00.02. ’00.09. ’01.06. ’01.06. ’01.10. ’02.02. ’02.07. ’02.09. ’02.10. NATE Air Online Image Dl. Download Video VoD/ MONETA NATE EV-DO MMS NATE Photo SMS Info. service Streaming AoD NATE Drive GPS (IMT-2000) DAB NATE PDA 1x EV-DO ’03.05. ’03.09. ’04.06. ’04.11. ’05.01. NATE NATE Video Melon: Satellite VoD : Video-on-demand AdmoA Code Telephony Music portal DMB AoD : Audio-on-demand GPS : Global Positioning System MMS : Multimedia Messaging Service DAB : Digital Audio Broadcasting AdmoA : Mobile advertisement service Melon : Integrated Music Portal DMB : Digital Multimedia Broadcasting 4
  • 5. I. SKT Overview Market Saturation & Solution Service Area Expansion enables operators to overcome market saturation by creating new market with converging existing service with new items from different service area. Expansion to New Converged Service Marketing Strategy Service Strategy Broadcasting, DMB Well designed Innovative Marketing and Converged Service Promotion Strategy Mobile Location Commerce, Based Service, Telemetics Platform Strategy Telecom Terminal Strategy Multi-Device Mobile VOD/MOD, Suitable Terminal Finance Multimedia Integrated designed for Service Service Personal Platform Home Converged Service Automation 5
  • 6. II. Converged Service Status NATE ON NATE ON is an instant messaging service for the users to enjoy seamless instant messaging regardless of time and location NATE ON (PC) Mobile NATE ON  Mobile instant messaging service with same functionalities and information of PC version;  Client based instant messaging service send/receive instant messages, check emails,  Ability to log on simultaneously with mobile register/find buddies NATE ON  Unique services leveraging features of mobile terminal such as WAP buddy, real-time SMS, audible “emoticons”, and background music 6
  • 7. II. Converged Service Status Cyworld “Cyworld” is a popular wired & wireless community & blog service which became the home of ubiquitous and convergence service among Korean youths Web-based Community & Evolution to convergence personal Blog service by mobile integration  Personal Blog : Mini Homepage  Access to the same services and  Decoration of Mini Homepage with contents of Web environment board, diary, avatar,  Ubiquitous features such as  Upload of photos, music, from PC updating Mini-homepage anytime  Easy to use and navigate friend’s & anywhere mini-homepage  Real-time upload photo from  Very successful for item business camera phone, send SMS, etc. 아궁 귀여워 !!!! 메뉴 Mobile Cyworld Access Mini-homepage & Mini-homepage Main page with mobile phone 7
  • 8. II. Converged Service Status AMS AMS is a next generation enabling platform which provides smart card and related applications to be issued through mobile devices Current Issuer-centric Service AMS-based Customer-centric Service Credit Card M-Bank Handset Subscription & Cancellation Traffic M-Bank Card at Bank Subscription & Cancellation Subscription & by mobile device Subscription & Cancellation any-time, any-where Cancellation at Sales Agent at Card Company Satellite Member- Broad- ship casting Credit e-voucher Traffic Card m-voucher Handset Handset  Can not integrate additional application  Can add & modify service according to after smart card is issued customer’s needs even after issue  Separate smart card for each service  Only one smart card chip for all services 8
  • 9. II. Converged Service Status Ubiquitous Music Service – Melon MelOn goes even further than iTunes and lets subscribers to download & play unlimited number of DRM-coated music files in mobile handset, PC, and MP3 player, with monthly flat rate. PC Mobile Phone MP3 Player Multimedia Music “Rental-based” Flat Launched in Nov. Service Rate 2004 Music Video, Monthly Flat Rate for 600,000 paid subscribers Photo Album unlimited services (Mar. 2005) 9
  • 10. II. Converged Service Status Wireless Data/S-DMB Converged Service With the emergence of technical innovation, boundary of mobile network and broadcasting becomes more ambiguous. Satellite DMB, a convergence mobile broadcasting service from satellite is a good example of such trend. Ku-band (13.824~13.883 GHz) Ku-band Contents (12.214~12.239 GHz) S-band (2.630~ 2.655 GHz) Gap Filler S-band VoD, MoD m-Commerce 1x EV-DO Combined with the Hybrid Terminal Vehicle-mounted Dedicated existing mobile Internet Terminal Terminal 10
  • 11. III. SKT’s Standpoint Business Model with S-DMB Win-Win business model between SK Telecom and TU Media, S-DMB Business Model with S-DMB Benefit to SK Telecom SK Telecom TU Media 1. Revenue Increase by Consignment Contract SK Telecom TU Service Service Charge Media • Getting • Broadcasting Charge Except Commission Subscribers in • Contents Sourcing Mobile H/S Market & Development 2. Revenue Increase by WAP Service • Terminal Sales • Network & SK Telecom i WAP • Distribution Platform Mgt. Broadcasting Using Service Service VOD/MOD Channel Mgt. 3. Entrance to Broadcasting/Media Industry Voice + Data (M-Finance, M-Commerce) Distribution Broadcast Service Service + Seeds Business for SK Telecom CP, PP, SO SK Telecom : Gain Additional Revenue & Value from S-DMB TU Media : Gain Marketing Power from SK Telecom 11
  • 12. III. SKT’s Standpoint Revenue Impact & Synergy ■ Revenue Impact  Revenue Share 25% of TU Media’s S-DMB product sales  $25 Million yearly income for the next 12 years on Satellite rental fee  Distribution commission on SKT sales network (25% of Initial subscription charge & Monthly basement fee)  Network management, BTS rental, and administration fee ($13M in 2005) ■ Synergy  Increase customer satisfaction and royalty with hybrid handsets sales  Synergy through integration with Mobile Internet and contents sharing  Cost saving in Cellular Network throughput investment with new medium  Diversifying contents distribution channel 12
  • 13. III. SKT’s Standpoint Cannibalization 최소화 ■ Cannibalization  Exact extents of cannibalization on existing Mobile Internet is unclear due to the early stage of service.  Partial cannibalization is expected to happen.  Overcoming the limitation of DMB as one-way broadcasting by integrating it with Mobile Internet to achieve two-way communication, and increasing data sales.  Existing VoD Service (June) will focus on the On Demand feature to position itself against DMB service. ■ Marketing Cost  Promotion is only done by SKT at the moment, but the market is expected to expand when the competitors start attracting subscribers 13
  • 14. III. SKT’s Standpoint Contents 강화 ■ Contents  With the emergence of Multimedia and Entertainment in Mobile Internet contents, importance of contents acquisition and distribution will increase.  Digital Content Market is expanding and enhancing, possibility of creating New Business in C-P-N-T value chain will increase.  Controlling strategic contents will enable higher usage of S-DMB, as well as next generation service such as WCDMA and Wi-Bro.  Enlarging markets through diverse investment such as movie and music funds to increase contents quality and set up win-win relation with CPs.  Currently searching for the next strategic contents after movie and music with various possible scenarios 14
  • 15. IV. Perspectives For successful launch of telecommunication-broadcasting integrated service, market-proven and easy-to-use data contents will converge with broadcasting mediums. Telecommunication-Broadcasting Integration Convergence Service Priorities  Provide information related to on-air Broadcasting Service Data Casting      Information programs through Mobile Internet. Ad.      Revenue Model : Info. Usage Fee, Traffic Education      Sell Data Contents related to programs News  Commerce (Ringtone, RBT, Music Video, Shopping)  Revenue Model : Content Sales, Traffic Sports     Movie     Replay old programs through Data On Demand Streaming on demand Music Video      Revenue Model : Info. Usage Fee, Traffic Music      Provide information and guide about Commerce Information Streaming LBS IM/SMS Telematics EPG programs through Mobile Internet  Revenue 모델 : Advertisement, Traffic Wireless Data Service  : Available Immediately  : Expected in the future ※ EPG: Electronic Program Guide 15
  • 16. IV. Perspectives Convergence Broadcasting is expected to develop into a more complex and enhanced service. To support such development, SKT is working on issues such as integrated platform, data broadcasting support, and device diversification. Phase Ⅰ Phase Ⅱ Phase Ⅲ Time 2005 2006 2007 • Commercialization of Contents • Communication/Broadcasting • Communication service Object Technology Tech’ Platform Integration technology expansion • Contents distribution and (Contents, Authentication, Billing,) • Data Broadcasting protection technology development Entertainment Contents Integration • Integration of Game Channel and Mobile Game • Integration of Sports Channel and Information Service  Integration of Audio Channel Service and Music Contents (Ringtone, RBT) Commerce, Communication Integration  Service switch with Hot Key • Integration of Broadcasting programs and Data service (Home Shopping, Lottery Sales) • Integration of On-air IM (Communication), and LBS service 16
  • 17. Thank You 17