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Netmanias.2016.08.01.kcr.agust.2016

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Netmanias.2016.08.01.kcr.agust.2016

  1. 1. Korea Communication Review © Netmanias Consulting • www.netmanias.com The Trusted News and Resource for Korean ICT Market and Technologies August 2016 01 | Mobile connections in South Korea reached 60 million – driven by IoT 02 | New and more spectrums for key emerging sectors - 6,859 MHz for IoT, drones and self-driving cars 03 | KT doubles coverage of maritime LTE up to 200km and introduces ‘IoT Life-Tech Jacket Marine’ 04 | SK Telecom Commercializes Nationwide LoRa Network for IoT 06 | Mobile Market Data - Market Stagnation and Degrowth 07 | KT to present IEEE 802.11.ac Wave2-based 'GiGA WiFi 2.0' capable of up to 1.73 Gbps 08 | KT's olleh tv launched the world's first IPTV HDR service 09 | KT Internet Revenue: Enhanced sales on GiGA subscriber increase 10 | Interview with Jinhyo Park, Head of Network R&D Center at SK Telecom: SK Telecom to establish consortiums with global and domestic vendors to lead 5G era 11 | KT SDN/NFV Strategy for Enterprise Virtual CPE (vCPE) 12 | Network Architecture Evolution: 4G→5G (Korean Operator’s View) 13 | Standard specification for 5G pilot service in 2018 Pyeongchang Winter Olympics 14 | KT signed an MOU with 5 domestic and overseas manufacturers for GiGA Wire’s entry into overseas markets 15 | LTE/Wi-Fi Multipath Aggregation: Instantly upgrade the performance of your mobile network via NETVISON TELECOM’s MPAS solution 17-19 | Korea Market Data 20| LTE/LTE-A commercialization by South Korea’s big 3 operators 21 LTE/LTE-A/LTE-A Pro commercialization by South Korea’s big 3 operators The Korea Communication Review (ISSN 2384-2792) is published monthly by the Netmanias, Inc. Publisher/Editor: Dr. Harrison J. Son son@netmanias.com Associate Editor: Dr. Michelle M. Do misun.do@netmanias.com Advertising Sales and Business Development: Yunhee Son sonshinepark@netmanias.com Corporate Address: 2F, Namyeong Building, 730-13, Yeoksam-dong, Gangnam-gu, Seoul 135-921, South Korea Home Page: www.netmanias.com Copyright © 2016 by Netmanias, Inc. Reproduction by any means is prohibited without permission From the publisher. Contact Netmanias, Inc. for more information.
  2. 2. Mobile connections in South Korea reached 60 million – driven by IoT July 30 In the first half of the year, SK Telecom, KT and LG U+ rolled out their IoT-dedicated networks, and now they all plan to release various IoT services in the second half of the year. The IoT market in the nation is forecasted to grow even further this year and on. increase of 100,000 connections in IoT each month. IoT connections have been on the rise – starting from 3.0 million in 2013, to 3.5 million in 2014 (up by 14.2%), and then up by 23.4% in 2015, showing a fast increase in growth rate. The growth trend was most noticeable in wearable and vehicle control sectors. The wearable sector alone saw a more than 20-fold increase in just two years, from just 50,000 in 2014 to 610,000 in 2016. Currently, IoT connections account for 8.0% of the entire mobile connections. As of the end of June 2016, the number of mobile connections in South Korea reached a record of 60 million. Mobile phone subscription reached 54.3 million, 2.2% up from a year ago. Given the nation’s population of 52 million, the mobile market is already fully saturated. During the same period of time, the number of IoT connections has also increased to 4.8 million by 24.0%, substantially driving the increase in mobile connections. This year, there has been an average - 10 20 30 40 50 60 70 2013 2014 2,015 2016.06 2013 2014 2015 2016.06 60.1M58.9M57.3M 54.7M 3.0M 3.5M 4.3M 4.8M (8%) 54.3M53.7M52.8M51.6M IoT connection: IoT device with 3G/4G modem (door lock, CCTV, gas value, smart watch, vehicle control, etc.) Phone subscriber: 3G/4G phone subscriber Mobile Connections Connections [Million] Mobile Connections and IoT Connections in Korea Source: MSIP 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2014.12 2015.06 2015.12 2016.06 Wearable Vehicle Control 2014.12 2015.06 2015.12 2016.06 Connections [x1000] IoT Connections Break-Down Source: MSIP Tablet Mobile Payment Remote Control Others IoT Connections Phone Subscribers Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 1 IoT Connections
  3. 3. New and more spectrums for key emerging sectors - 6,859 MHz for IoT, drones and self-driving cars South Korea to change regulations to offer new and more spectrums for key emerging sectors, 6,859MHz for IoT, drones and self-driving cars. The Ministry of Science, ICT and Future Planning (MSIP) decided to make a total of 6,859 MHz of bandwidth available for three key emerging sectors with the greatest potential: IoT, drone and self- driving car. The decision was made to promote development of relevant technologies and formation of markets by proactively offering the resource to the sectors as the relevant markets began to form. IoT In order to streamline service provision in the sector, IoT sector will be given additional 110 MHz - 6 MHz at 940 MHz (940 - 946 MHz) for long-range IoT like location tracking, remote metering, etc., and - 104 MHz at 1.7 GHz and 5 GHz for short-range purpose like smart home. Drone For drones, a total of 2,679 MHz will be given - new 2,520 MHz for satellite-controlled drones, and - additional 159 MHz for drone-related services like video transmission for environmental and fire monitoring (specifically, 100 MHz for small- sized drones and 59 MHz for medium/large-sized drones) Self-Driving Car A total of 4,070 MHz will be assigned to self-driving cars. - The Ministry of Land, Infrastructure and Transport is currently operating a pilot service of C-ITS, a new AI traffic control system (scheduled to be launched in 2018). For introduction of new services of the system, 70 MHz at 5.9 GHz will be assigned in advance. - Assignment of additional 77 - 81 GHz (4 GHz width) for anti-collision HD radar will make it possible to detect a 7.5 cm-long object from up to 100m away. July 16 Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 2 Regulation 10 mW/MHz 10 W 52 W 1 W 10 mW/MHz 10 mW/MHz 10 mW/MHz Drone Control To be available Spectrum plan for drone 11/12/14/19/29 GHz (2,520 MHz) Service 5091 – 5150 MHz 5650 – 5725 MHz 2400 – 2483.5 MHz 5030 – 5091 MHz Available now 5825 – 5850 MHz 5725 – 5825 MHz Purpose Max. Tx power Total 2,923.5 MHz 2,679 MHzTotal 244.5 MHz 3 mW 2 W -41.3 dBm/MHz (around 3 mW) 55 dBm 50 → 55 dBm 45 dBm Communication To be available Spectrum plan for self-driving car 5855 – 5925 MHz Sensing (Radar) 433 MHz 34.275 – 34.875 GHz Available now 24.25 – 26.65 GHz 76 – 77 GHz 77 – 81 GHz Purpose Max. Tx power Total 8,070 MHz 4,070 MHzTotal 4,000 MHz 200 mW 200 mW 100 mW 10 mW/MHz 10 mW/MHz 10 mW/MHz 10 mW/MHz 10 mW/MHz 10 mW/MHz Long-range To be available Spectrum plan for IoT 940 – 946 MHz 1788 – 1792 MHz Short-range 917 – 923.5 MHz 2400 – 2483.5 MHz Available now 5150 – 5350 MHz 5650 – 5725 MHz 5470 – 5650 MHz Purpose Max. Tx power Total 680 MHz 5725 – 5825 MHz 5825 – 5850 MHz 110 MHzTotal 570 MHz
  4. 4. KT doubles coverage of maritime LTE up to 200km and introduces ‘IoT Life-Tech Jacket Marine’ July 7 whenever. KT also installed a system at Taebaek Mountain and secured LTE coverage that goes from coast of Gangwon-do to Ulleung-do. Free data communication service is now possible on major sea routes and fisheries that are located within 200km from coast, which did not have access to LTE service without repeaters. KT also introduced ‘IoT Life-Tech Jacket Marine’, which will strengthen maritime safety. Locating survivors on seas is difficult due to ocean current and looking for them is also difficult since distance of identification is short during night time. To solve such problems, KT had worked with KOLON Industry Co., Ltd. and have developed IoT Life-Tech Jacket Marine. This jacket can be used as a normal outdoor jacket. Once a person falls in water, a life tube automatically expands as a sensor that detects water pressure operates. Since IoT modules are installed within this jacket, location of survivors and status of health such as heartbeat can be checked periodically from situation rooms. This jacket uses KT’s IoT platform called ‘IoT Makers’. “Maritime safety is important as there were 900 maritime accidents and 2,000 casualties in last year.” said Director Oh Seong-mok of KT Network Sector. “Wide coverage, information of location, and IoT device are needed for maritime safety and we can now provide safe telecommunication on most of coast in South Korea through our technology that was announced today.” KT has increased LTE coverage by using LTE Time Advanced technology and OTHAD. LTE Time Advanced is a technology that improves processing of wireless signals and methods of reception. It automatically adjusts synchronization timing between a device and a base station depending on a distance and it connects a device and a base station even from a long distance. OTHAD maximizes level of perfection of reception and transmission of data and minimizes in long distance through a formation of antennas. KT installed OTHAD at Halla Mountain and succeeded in making a LTE-based voice call to an ocean research station located in Ieodo, which is located 185km southwest from Halla Mountain. Ieodo, which had depended on satellite calls, now can send a clear emergency situation and request for rescue and has an environment where people can enjoy internet By An, Hocheon (hcan@etnews.com) Technology that can double coverage of maritime LTE up to 200km has been developed. It is predicted that maritime safety will be more enhanced as LTE communication is now possible in wide range of sea that goes from coast of Gangwon-do to Ulleung-do. KT has developed OTHAD (Over The Horizon Antenna Distribution) that is based on ‘LTE Time Advanced’ technology and announced that it has succeeded in increasing LTE coverage for seas up to 200km without repeaters. Currently LTE is covered up to 100km from land without using repeaters. To secure more coverage, repeaters for ships are needed. 100km is a technology that is used by mobile telecommunication businesses for Tongyeong, Donghae Harbor, Ulsan Harbor, Jeju Harbor and others and is based on LTE-M technology that is used for e-Navigation. Director Oh Seong-mok of KT’s Network Division explains key features of 'IoT Life-tech Jacket Marine'. Director Oh Seong-mok of KT’s Network Division introduces 'IoT module' that the company will be presenting soon, and explains about NB-IoT. Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 3 IoT Use Case
  5. 5. SK Telecom today held a press conference to announce the completion of the nationwide deployment of Low Power Wide Area Network (LPWAN) based on LoRa technology; the launch of price plans for LoRa-based IoT services; and its plans to vitalize the IoT ecosystem. The company finished building LoRaWAN across the country by end of June, six months earlier than its initial schedule, covering 99 percent of the population. By securing both nationwide LTE-M and LoRaWAN, which are two main pillars of the IoT network, SK Telecom said that it is now fully ready to create valuable business opportunities in the IoT era. The company had completed nationwide LTE-M rollout in March, 2016. To promote the growth of the IoT market, SK Telecom plans to offer attractive price plans and develop innovative IoT services, while offering strong support for SMEs. To this end, the company will invest a total of KRW 100 billion by the end of 2017. It expects these efforts to lead to rapid expansion of the IoT industry by connecting over 4 million things to its IoT-dedicated networks by the end of 2017. ■ Price Plan for LoRaWAN SK Telecom unveiled new price plans for LoRaWAN- based IoT services. The “Band IoT” plans come in six different tiers – i.e. from Band IoT 35 (approx. USD 0.3) priced at KRW 350 to Band IoT 200 priced at KRW 2,000(approx. USD 1.75) - depending on data use (refer to table 1) to allow SK Telecom’s customers – both enterprises and individuals - to choose one that suits the needs of their services. The Band Lora plans are highly affordable - costing merely one-tenth of SK Telecom’s LTE-based IoT services - and thus are expected to support active development and provision of diverse IoT services by easing the cost burden of startups and SMEs. The company is also offering diverse discount benefits for enterprise customers depending on their contract period and the number of lines they use. SK Telecom Commercializes Nationwide LoRa Network for IoT July 04 Service Platform Vertical (e.g., Utilities) SK Telecom Open IoT Platform (ThingPlug) Data IoT Service by BP LoRa Device LoRa Module (Local vendors) LoRa Chip (Semtech) SK Telecom Native Service (B2C tracker) Data generated /collected from device of IoT service subscribers SK Telecom devices BP devices Utility devices Location data AMI data Temp./Humidit y data Open API Open API oneM2M oneM2M LoRa Connectivity Platform LPWA LoRa Connection LoRa Nationwide Network Mash-up Service End user/ Enterprise/ Government IoT ServicePlatformNetwork (Connection) Things (Chip/Module/Device) New/Advanced Services Tracking Monitoring Metering Service, Device Connection (5%) IoT Platform (15%) IoT Service/device (80%) SK Telecom’s E2E IoST Architecture (Source: Netmanias.com) Future IoT Market Volume Share (SK Telecom’s Estimation) ... ... Service, Device Service, Device ... Service, Device Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 4 IoT
  6. 6. At IoT Open Testbed, SMEs and startups will be able to verify their IoT devices, carry out tests to check interworking between their device and the IoT network/ platform, and receive technical/service consultation. SK Telecom also began providing LoRa modules free of charge on July 1, 2016. Aimed at facilitating the development and launch of LoRa services, the company will provide a total of 100,000 units of LoRa modules for free. Also, the low cost of the LoRa module – which is just one-fifth of that of an existing LTE module – will contribute to the development of the wide variety of IoT devices. “SK Telecom is proud to announce the nationwide deployment of LoRaWAN as it marks the first important step towards realizing connectivity between infinite number of things, going beyond the traditional role of telecommunications centered on connectivity between people,” said Lee Hyung-hee, President of Mobile Network Business at SK Telecom. “Going forward, SK Telecom will develop and offer a wide variety of IoT services designed to offer new value for customers, while working closely with partners including SMEs and startups to vitalize the IoT ecosystem.” monitoring service at Changjo (Creative) Village in Sejong. Furthermore, the company plans to launch a total of 20 LoRa-based IoT services by the end of 2016, including a manhole monitoring service (in September) and a real- time shared parking service (in October). ■ Partner Hub Program Besides developing and launching IoT services of its own, SK Telecom will be making multifaceted efforts to vitalize the IoT ecosystem by encouraging the participation of developers, SMEs and startups. To this end, the company plans to set up a comprehensive program named ‘Partner Hub Program’ to nurture partners. Through the program, SK Telecom will share its expertise and knowhow, provide training and conduct joint development/marketing. To support the development of IoT services and devices, SK Telecom will create a space called ‘IoT Open Testbed’ for SMEs and startups at its Bundang Building to offer a one-stop development environment - which encompasses network, device and platform - for IoT services. SK Telecom Commercializes Nationwide LoRa Network for IoT July 04 For instance, a gas meter, which transmits relatively a small amount of data can be used by signing up for Band IoT 35, while a service that requires real-time communication like lighting control service can be used by signing up for Band IoT 200. ■ LoRa-based Service Roadmap Considering the characteristics of the LPWA network, SK Telecom plans to develop services in the areas of metering, tracking and monitoring. In the area of metering, the company is currently focusing on Advanced Metering Infrastructure (AMI), which enables the utilities companies to not only accurately measure/monitor usage but also control the metering devices. SK Telecom has been conducting a pilot project on AMI with SK E&S since November 2015, and plans to expand the service coverage to more regions of the country in July 2016. Going forward, the company will launch AMI services for other utilities including water and electricity. SK Telecom is also developing in tracking services to identify and track the location of vehicles, people/things, and assets. In cooperation with the local governments, the company plans to launch “Safe Watch,” a wearable designed to enhance the safety of children and the elderly in July 2016. Moreover, SK Telecom will offer monitoring services capable of controlling and managing manufacturing/ public/commercial facilities. For instance, monitoring service for a company that has a large-scale production facility will ensure that the equipment within the facility are operated in an optimal manner and the production environment is kept safe at all times. Environmental monitoring of CO2 concentration, temperature/humidity, as well as hazardous substances – e.g., measuring concentration levels of radon in the atmosphere and soil – can also be provided. In August 2016, SK Telecom will start an environmental KRW 350 KRW 1,000 KRW 500 KRW 700 KRW 1,500 KRW 2,000 100 KB 10 MB 500 KB Data Allowance* Examples of Services 3 MB 50 MB Monthly Flat Rate 100 MB Note Band IoT 35 Band IoT 100 Band IoT 50 Band IoT 70 Band IoT 150 Band IoT 200 Price Plan Metering and monitoring services (e.g. AMI, environmental monitoring, water leakage monitoring, etc.) Tracking services (e.g. locating tracking for people/things, asset management, etc.) Control services (e.g. safety management, lighting control, shared parking, etc.) - Discount benefits for long-term contracts: Ranging from a 5% discount for two-year contracts to a 20% discount for 5 year- contracts - Multi-line discount: Ranging from a 2% discount for those using 500 lines to a 10% discount to those who use 10,000 lines *Data usage exceeding the data allotment provided will be charged at KRW 0.005 per 0.5KB. Table 1. Price plan for LoRaWAN Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 5 IoT
  7. 7. Mobile Market Data - Market Stagnation and Degrowth July 30 Korean big 3 mobile operators (SK Telecom, KT and LG U+) have been presenting innovative LTE services (LTE-A, LTE CA, etc.), all world’s first, every year since its LTE service launch in 2011. The operators have posted higher ARPU and revenues thanks to an increase in LTE subscriptions, which has a higher ARPU than 2G/3G. However, recent years have seen a stagnation in mobile subscription growth, and LTE subscribers who were once responsible for high ARPU are now switching to more affordable phones and plans. This has slowed mobile ARPU growth, consequently affecting the big 3’s revenue. The operators, with most of its profits coming from the sale of mobile devices and service plans, are now in desperate need of new services and business models that can reverse the downward trend of the heavily smartphone-dependent mobile industry. 24 26 28 30 32 34 36 38 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2014 2015 2016 SK Telecom 24 26 28 30 32 34 36 38 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2014 2015 2016 KT 24 26 28 30 32 34 36 38 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2014 2015 2016 LG U+ Mobile ARPU (MNO only) Mobile Service Revenue (MNO only) 2,550 2,600 2,650 2,700 2,750 2,800 2,850 2,900 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016 SK Telecom 1,200 1,300 1,400 1,500 1,600 1,700 1,800 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016 KT 600 700 800 900 1,000 1,100 1,200 1,300 1,400 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016 LG U+ 20162012 2013 2014 2015 20162012 2013 2014 2015 20162012 2013 2014 2015 2016.062012 2013 20142011 2015 20162012 2013 20142011 2015 20162012 2013 20142011 2015 SK Telecom KT LG U+ [x1000KRW] [KRW Bn] [x1000KRW] [KRW Bn] [x1000KRW] [KRW Bn] Decrease Decrease Stagnation Stagnation Stagnation Stagnation YOY: -1.0% YOY: 2.0% YOY: 2.8% YOY: -1.1% YOY: 1.3% YOY: -0.4% Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 6 Market Data
  8. 8. KT is launching ‘GiGA WiFi 2.0’ on the 22nd, supporting up to 1.73 Gbps - twice faster than the current GiGA WiFi serving public areas like coffee shops, theaters, malls, apartment building. The current GiGA WiFi, based on the global standards IEEE 802.11.ac Wave1, can achieve up to 1.3 Gbps (and up to 867 Mbps on mobile), and serve up to 512 active users concurrently. IEEE 802.11ac: 5G 802.11 wireless network standard specifications GiGA WiFi: 802.11ac-based wireless standards capable of over 1 Gbps of transmission speeds The new ‘GiGA WiFi 2.0’ is based on the next generation standards, IEEE 802.11ac Wave2 (Phase 2), and is known to support up to 1.73 Gbps for now, but up to 3.4 Gbps when upgraded. GiGA WiFi 2.0: 2nd generation 802.11ac that supports up to 3.4 Gbps through 160 MHz channel bonding With GiGA WiFi 2.0’s 1.73 Gbps, an UHD movie (about 16 GB) can be downloaded in just one minute, or 100 songs in Free Lossless Audio Codec (FLAC) format (4 GB) in just 17 seconds. In addition, the new service features Multi-User Multiple Input & Multiple Output (MU-MIMO) that offers improved quality of experience to customers and Wireless Intrusion Prevention System (WIPS) that detects and blocks access of unauthorized Access Points (APs) or devices, providing added wireless security. KT already has over 200,000 WiFi APs - the largest number in the nation - operating across the nation, with over 40,000 WiFi APs installed at major nationwide franchises like Starbucks, Café Bene, Twosome Place, CGV, Kyobo Bookstore, bus stops, underground malls, airports, KTX stations, and other major landmarks and apartment buildings, etc. Currently, around 310 million people are using GiGA WiFi, causing about 1,888 TB of wireless traffic every month. GiGA WiFi 2.0 will be first launched in major landmarks like Seoul Central Station and Yongsan station, and then the service will go nationwide gradually. KT mobile subscribers can use GiGA WiFi and GiGA WiFi 2.0 at no extra charge, and others can purchase ‘WiFi plans’ online or at any participating convenience stores. Anyone who uses GiGA WiFi-compatible devices like Galaxy S7, LG G5 or iPhone 6, etc. can use GiGA WiFi 2.0 without any upgrade or change. Once devices compatible with GiGA WiFi ‘2.0’ become available in the market, speeds of up to 1.73 Gbps can be supported on mobile as well. Piljae Lee, head of the Marketing Strategies Division at KT, said, “KT became the first in the world to deploy the commercialized GiGA WiFi 2.0 network.” “Now we are exerting our efforts to further expand the coverage of the network.” KT to present IEEE 802.11.ac Wave2-based 'GiGA WiFi 2.0' capable of up to 1.73 Gbps July 25 1.3 Gbps Maximum speed 20, 40 MHz 20, 40, 80, 80 + 80, 160 MHz Upto 4 x 4 1.73 Gbps 3.4 Gbps (When upgraded) 867 Mbps 1.73 Gbps (When used w/ compatible devices) 512 July 2016 20, 40 MHz 20, 40, 80 MHz Upto 4 x 4 1.73 Gbps 867 Mbps 512 December 2015 Frequency bandwidth Wave 1 20, 40 MHz 20, 40, 80 MHz 802.11a/b/g/n/ac Upto 3 x 3 2.4 GHz Antenna 5 GHz Wireless specification AP 867 Mbps Smartphone (2x2) Item Phase 1 Phase 2 (GiGA WiFi 2.0) 512 April 2013Launched in Maximum active users (GiGA WiFi) Wave 2 KT GiGA WiFi Specifications Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 7 New Services
  9. 9. 8.43 6.81 0 1 2 3 4 5 6 7 8 9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 KT Broadband Subscribers KT IPTV subscribers KT UHD IPTV Subscribers KT held a press conference at the KT Square in Gwanghwamun, Seoul, on the 12th, announcing the commercialization of the world’s first HDR IPTV service, along with Samsung Electronics and Warner Bros. The conference was attended by Yoo Hee-kwan, head of the Media Business Division at KT, Youngchan Kim, managing director of the Service Business Division at Samsung Electronics, and Clarence Lo, VP - APAC at Warner Bros. At the conference, KT said that it developed a set-top box specifically designed for HDR technology. The company, in cooperation with many content providers, including Warner Bros., plans to provide 65 HDR contents like “Batman vs Superman: Dawn of Justice”, “Mad Max: Fury Road” and more as IPTV services by the end of the year. HDR reproduces a greater range of luminosity to present natural images as captured on the retina of the eye. While TV services so far have mostly focused on merely offering higher resolution and more pixels, HDR is aimed to provide a much more realistic image. While typical UHD with poor color gamut can achieve only up to 100 nits, HDR can improve it up to 1,000 nits, raising the contrast by 10 times. HDR makes it possible for viewers to see the exact shade of green on a highway and the exact gleam off the surface of a lake on a TV. For this reason, HDR is expected to be a key technology in UHD TV soon. Global leading TV makers and content providers have long expressed their keen interests in HDR. However, not much effort has been made by platform providers. Now, with the HDR commercialization, KT hopes to promote the formation of a HDR ecosystem and relevant markets through close cooperation with the two partners and more platform, device and content providers. Anyone who are now subscribing to ‘GiGA UHD tv’ service can enjoy HDR service at no extra charge. New subscribers can use the HDR service immediately. Current ‘GiGA UHD tv’ subscribers can begin HDR experience after firmware upgrade, without set-top box replacement. Youngchan Kim, managing director at Samsung Electronics, noted, “We highly recognize KT’s effort and achievement to bring the world’s first HDR to realize the best video experience.” “We will make our best effort to supply high performance HDR TVs for the new service.” Clarence Lo, VP - APAC at Warner Bros. said, “We are pleased to have this great opportunity to introduce our HDR TV content to Korean viewers.” She added, “We believe the KT’s HDR service launch will help Korea become a leader in HDR TV.” Yoo Hee-kwan, head of the media business division at KT, noted, “HDR will become a new norm in IPTV sector.” “We will continue to stay committed to provide our customers with differentiating services and experiences.” Currently, KT's olleh tv has five UHD channels, the most among paid-in TV service providers in the nation, and about 1,400 UHD titles. It has been offering UHD channels and content through the nation’s widest bandwidth since April. In July, it will begin all-channel full HD service (no SD) – for the first time in IPTV and paid-in TV sectors. KT's olleh tv launched the world's first IPTV HDR service July 15 High Dynamic Range (HDR), a technology that provides a higher level of contrast between light and dark images on the screen to create a much more realistic image, is to be used in IPTV. Million KT Subscribers (Q2 2016) 07 08 09 10 11 12 13 1406 15 16 UHD IPTV Subscribers: 480,000 (Feb. 2016) Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 8 New Services World’s First UHD IPTV service (1CH)914 World’s First IPTV HDR service7 16 UHD IPTV 3 Channels615 Launched IPTV service1108 Launched Full HD IPTV service13 12 UHD IPTV 5 Channels4
  10. 10. 117,000 261,000 448,000 560,000 1,000,000 1,330,000 1,728,000 410 420 430 440 450 460 470 480 490 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 KT Internet Revenue: Enhanced sales on GiGA subscriber increase Internet Revenue Giga Internet Subscribers Total Internet Subscribers Sales to rebound from 3Q15 on GiGA effect * Internet interconnection revenue recognized from 1Q16 [KRW] BnSubscribers Launch of GiGA Internet (‘14.10) * Speed Monthly Fee (3-year-commitment) 100 Mbps KRW 20,000 ($18) 500 Mbps KRW 25,000 ($23) 1 Gbps KRW 30,000 ($27) 20% of KT Internet Subscribers KT Internet Subscribers and Internet Revenue 8.4M Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 9 Market Data July 30 Since its launch in Octbober 2014, KT's GiGA Internet service, which provides ten-fold faster speeds than the conventional Internet service, had continued to gain popularity. The subscription growth led to ARPU boost in the Internet service, allowing the Internet revenues to rebound in Q3 of 2015. By Q2 of 2016, the subscription reached 1.7 million, which accounts for 20% of the company's Internet service subscription (8.4 million).
  11. 11. and vendors in Silicon Valley, to create a Proof-of- Concept (POC).” He added “Partial application of SDN and NFV will be made to the commercial network in the second half of the year. If satisfying quality is achieved, the application can be expanded to 5G as well.” “For this, we plan to collaborate with Nokia to create a PoC, and establish consortiums with Korean SMEs and Silicon Valley vendors to facilitate introduction of innovative equipment in the end of the year or next year.” He added “An approach of combining repeaters from Korean manufacturers with software from Silicon Valley can be adopted.” What the company is attempting to do is to maintain partnership not only with global players like Nokia, Samsung and Ericsson, but also with small-sized, but technologically-advanced vendors. To this end, SK Telecom is also considering partnership with technologically-skilled members of Telco Infra Project (TIP), which it founded with global IT leaders like Facebook for the coming 5G era. He pointed out “We are to adopt an approach where best quality equipment including hardware, repeater, software, etc. is selected to make a base station, and merchantability is checked through POC. This kind of approach is required during this transition period.” He added “SDN and NFV will become basic necessities right from the beginning in the coming 5G era.” He also noted “Many companies will be able to take some portions of market shares which are currently held mostly by major players in the market.” “Opening of the SDN and NFV market will give new comers chances to enter the equipment market.” All these measures taken are believed to make the company ready for fully-fledged application of SDN and NFV in base stations from the second half of the year. Once they are applied, NFV software stack can run on any universal X86 servers, yielding excellent return on Interview with Jinhyo Park, Head of Network R&D Center at SK Telecom SK Telecom to establish consortiums with global and domestic vendors to lead 5G era July 13 By M.J. Choi, cmj@ddaily.co.kr SK Telecom (SKT, www.sktelecom.com) plans to prioritize efforts on implementation of Software Defined Network (SDN) and Network Functions Virtualization (NFV) from the second half of the year with the aim of taking the lead in 5G era. The company is adopting a two-track strategy. It will cooperate with global equipment vendors while establishing consortiums with SMEs in Korea as well as startups in Silicon Valley, for successful application of SDN and NFV, commonly recognized as essential components of the next generation network, to base stations. Jinhyo Park, Head of Network R&D Center at SK Telecom, shared the company’s plan for SDN and NFV application in the coming 5G era. He explained “Now that commercialization of SDN and NFV in the LTE core network is completed, we are now moving on to base stations. For virtualization in base stations, we will team up with global leaders, like Nokia investment. It has been a while since the company implemented SDN and NFV in the LTE core network, using equipment from Samsung Electronics, HPE, Telcoware, etc. It also completed a POC of a service platform co-developed with Cisco that provides a customized network, in its commercial network. He explained "Implementation of SDN and NFV will give excellent flexibility in terms of network investment. So far, you had to purchase equipment and software together. But, now you can get any inexpensive, safe hardware of your choice, and use it with high- performing software from a Silicon Valley vendor." What makes SDN and NFV different from existing solutions is that, unlike conventional network systems where hardware and software are inseparable, they allow hardware and software to be separable from each other. As it will be software that will primarily be in charge of controlling network functions, hardware will play a less important role, relatively. Operators will have flexibility in deciding how the two are combined. Also, virtualization of equipment functions will lead to enhanced network flexibility. Once SDN-compatible environments are introduced, networks can be virtualized and sliced as needed. This means operators can divide their networks into multiple slices/layers, and customize them to offer best- optimized services to their customers. He explained further "When it comes to utilizing resources, we will also be able to optimize them for different services like IoT, video, audio, etc. through virtualization, instead of having to use the whole resources." "For global roaming, for instance, we can provide our overseas partners with virtualIzed and customized slicing services so that our customers can still be served with the same quality service anywhere they go." ■ Jinhyo Park, Head of Network R&D Center at SK Telecom Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 10 Innovator Interview
  12. 12. KT SDN/NFV Strategy for Enterprise Virtual CPE (vCPE) Source: KT, Feb. 2016 FW (Juniper) Router (Cisco) WAN acc. (Riverbed) Customer Premise ONT/NID vSwitch X.86 server Physical Network Appliances Virtual CPE: Virtualized network appliances (VNF) on standard X86 servers W ER/PE Public Internet HQ/DC IP Backbone MPLS L3 VPN DC Access ER/PE vCPE location: Distribute or Centralize ? ONT/NID ER/PE HQ/DC IP Backbone MPLS L3 VPN DC Access Branch Office/SMB Edge PoP aggregation W vRouter vWOC vFW VNFs Source: KT, June 2016 KT use case: Enterprise services at Central Offices (vFW, vDHCP, vNAT, etc.) KT use case: NFV platform with 3rd party appliances SDN switch SDN switch White Box Public Internet vSwitch W vSwitch W ❷ Edge PoP/CO ❶ Customer Premise Virtual CPE Location KT Plan ❷ vCPE at Edge PoP/CO Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 11 Strategy
  13. 13. Korean Operator’s View Network Architecture Evolution: 4G→5G Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 12 5G Architecture 4G Core Applications RU DU Central Cloud (VM/NFV) Edge Cloud (VM/NFV) CU 5G Core (UP) AU ❻ Network connectivity among VMs: SDN DistributingCore (UserPlane) ❸ Distributing ApplicationServers (savebackhaulcost, low-latencyservices) Core: Control Plane ❹ RAN: redefine functions of DU and RU ❺ Commercial server (Virtualization) Dedicated equipment Dedicated equipment Dedicated equipment Dedicated equipment 300Mbps 2x2 antenna 10/20MHz BW LTE-A CA Massive MIMO 400MHz BW (mmWave) Massive Aggregation ❶ 20Gbps ❺ Commercial server (Virtualization) Applications 5G Core (UP) 5G Core (CP) CU AU IMS 5G Core (UP) 5G Core (CP) CU AU V2X 5G Core (CP) V2X CU 5G Core (UP) AU CDN 5G Core (CP) Cache CU 5G Core (UP) AU UHD Voice Massive IoT Mission- critical IoT ❼ Network Slicing MEC 5G Applications RU Dedicated equipment Dedicated equipment Center Node CO Cell Site Radio 75Mbps 2x2 antenna 10MHz BW LTE Device DU 4G Core D-RAN C-RAN Baseband RF eNB PHY, etc. (save fronthaul cost) Backhaul Fronthaul Backhaul ❷ Core function split Fronthaul Backhaul Network Slicing 4G Applications 5G Core (UP) 5G Core (CP) NFV, SDN DU: Digital Unit (BBU) RU: Radio Unit (RRH) CU: Central/Cloud Unit AU: Access Unit UP: User Plane CP: Control Plane MEC: Mobile Edge Computing NFV: Network Function Vitualization SDN: Software Defined Networking V2X: Vehicle-to-X IoT: Internet of Things IMS: IP Multimedia Subsystem Software-centric Architecture: 5G RAN and 5G core to be implemented as software on commercial servers
  14. 14. but this time it will be 8 100MHz bandwidths (a total of 800MHz). As 10MHz in LTE can give 75Mbps, up to 6Gbps can be achieved, theoretically. Practically it is impossible to secure such a wide bandwidth in a low frequency band. That's why 28GHz, an ultra-high frequency band with short radio propagation distance and low diffraction ratio, is chosen for the pilot service. 8x8 MIMO will be used, increasing data transmission by 4 times more than the current 2x2 MIMO that uses 2 antenna. This naturally means 4 times faster speeds, 24Gbps (4 x 6Gbps), which is by far faster than 20Gbps set by ITU. To implement 8×8 MIMO, base stations and software capable of supporting the solution must be in place first, and 8x8 MIMO-compatible devices have to be developed too. There is a system that uses 8 antenna, but not all of them can be used at once. The success of the pilot service lies on whether these pre-requisites can be secured by the end of next year or not. Subcarrier spacing, which can be explained as spaces Standard specification for 5G pilot service in 2018 Pyeongchang Winter Olympics By An, Hochun (hcan@etnews.com) During the 2018 Pyeongchang Winter Olympics, 5G pilot service will be offered by means of 8-band CA that combines 8 100MHz carriers, supporting over 10Gbps on devices - more than 33 times faster than the current LTE's maximum 300Mbps. The drastic speed improvement will make features like 360 degree realistic videos, realistic content services powered by VR and AR, etc. a reality. In addition, omniview service like multi- view streaming, remote-controlled drone racing, and more will become available for users to try. The '4th 5G Strategy Committee' that was held recently discussed standards for the 5G pilot service, including 800MHz-wide 8-band CA, MIMO, hybrid beamforming, etc. in addition to previously discussed 28GHz band. Other solutions like dynamic TDD, subcarrier spacing 75KHz, etc., will also be used for the service. CA, currently used in 4G LTE, is a solution that combines multiple carriers in a band to enhance speeds. Standardized CA, so far, could aggregate up to 5 20MHz bandwidths (a total of 100MHz), achieving 750Mbps, between radio signals that carry data, will be 75KHz - 5 times wider than LTE's 15KHz. Dynamic TDD can adjust traffic in UL and DL flexibly depending on traffic conditions as opposed to the conventional TDD which has fixed traffic transmission ratio in UL and DL, resulting in poor flexibility and interference issues. Beamforming is designed to control the amount of frequency generated according to demand. For the pilot service, a hybrid beamforming architecture that combines an analog beamforming and a digital precoding will be used. Korean operators and global companies participating in preparation of 5G pilot service are planning to finalize detailed standards for the service by the end of the month. Device development and network testbeds will be completed by Q3 and Q4 next year, respectively. Network testbed will be deployed in the Olympic villages and venues, Incheon international airport, Kwanghwamoon in downtown Seoul, etc. Director Oh Seong-mok of KT’s Network Division said, “By February 2017, a year before the event, we are planning to offer the same preliminary pilot service that we had offered until the end of last year." "A timeline of device and chip development will have to be confirmed before we know for sure, but we will try our best to eliminate any possible setbacks in advance to ensure the service becomes available in time." All of the Korean big 3 mobile operators announced their plans to offer pilot service in Pyeongchang and Seoul. KT will introduce features like live streaming service from athlete's point of view, 3D venue maps, omniview service like 360 degree multiview streaming, etc. And 5G bus by KT will let passengers experience VR hologram at their seats. What SK Telecom will offer includes 360 degree video- based realistic media, realistic content service powered by VR and AR, and more. LG U+ will present drone racing, ultra-multiple viewpoint content playback, network testbed cluster infra capable of over 20Gbps. Standards for 5G pilot service in 2018 (source: MSIP) Parameter Standard Specification Frequency BW 800MHz (100MHz x 8 CA) MIMO Up to 8 Frame architecture Self-contained Channel coding Low-density parity-check (LDPC) 5G-LTE integration 5G-LTE double connection (required) and 5G single connection (optional) Subcarrier spacing 75MHz Duplex Dynamic TDD UL/DL architecture Hybrid beamforming architecture Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 13 5G Architecture
  15. 15. KT signed an MOU with 5 domestic and overseas manufacturers for GiGA Wire’s entry into overseas markets July 7 Application: premises with copper wiring system (buildings and apartments, leased premises that need wireless internet service with gigabyte speed, historic sites that should remain intact when wire routing is installed nearby etc.) ※ For further information contact: KT Public Relations manager, Kyoungju Lee at +82-10-9530-5117, gigawire@kt.com What is GiGA Wire? Overview: GiGA Wire was jointly developed by Korean SMEs and KT and commercialized for the first time in the world. With this innovative technology, the Internet service can be provided at the speed of up to 1Gbps through copper wire such as telephone lines, coaxial cables, power lines and UTP cables. Standard: ITU-T G.996x (G.hn) Current status: GiGA Wire became commercially available by KT in 2015 and GiGA Wire 2.0 with speed of up to 1 Gbps will be introduced in the 2nd half of 2016. KT is collaborating with domestic and overseas manufacturers to expand the horizon of GiGA Wire. On July 5, KT Institute of Convergence Technology signed an MOU with domestic and overseas companies to further develop GiGA Wire and create a global ecosystem for the technology. The 6 MOU signees are KT, Marvell, Ubiquoss, Dasan Networks, Lightworks and Dongwon T&I and they agreed to collaborate for the promotion and standardization of GiGA Wire and establishment of standards for compatibility between devices. These companies for technological cooperation also plan to conduct a wide range of activities to inform overseas telecom service providers, device developers and the press of the excellent performance of GiGA Wire. Their activities will include joint research and standardization efforts to further develop and promote the application of the technology. The multilateral MOU is the first step for GiGA Wire developed by KT and Korean companies to enter into overseas markets and is expected to play a catalytic role to build a global ecosystem for the technology. The MOU will lay a foundation for the technology to secure competitiveness in the global market, helping KT to lead the domestic network equipment industry. 300Mbps Bundled telephone lines G.hn Access Multiplexer (GAM) MDF GNT 1-pair (Phone line) RJ11 RJ45 GNT 1-pair (Phone line) GNT 1-pair (Phone line) 300Mbps 300Mbps MDU (Condominiums, Apartment Complexes) Home Home Home ... IPT V STB No additional re-cabling construction POT S E-PON Central Office OLT L3 SW Splitter PSTN FTTP (Fiber To The Phone line) • deploys GNTs (G.hn Network Terminal) at home and GAM (G.hn Access Multiplexer) at MDF/IDF • provides point to point connection via existing telephone line (1-pair) • DL/UL = 300/300Mbps throughput per subscriber • VDSL2 replacement for higher speed broadband service Interne t G.hn Performance (source: ubiQuoss) ubiQuoss's G.hn productsSource: KT Distance (m) KT GiGA Wire - Instant upgrading to Giga-Class Internet Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 14 KT GIGA Wire
  16. 16. LTE/Wi-Fi Multipath Aggregation Instantly upgrade the performance of your mobile network via NETVISON TELECOM’s MPAS solution requires a considerable investment cost in installation of new LTE-U/LAA small cells (RRH or pico) in existing LTE networks. Plus, LTE-U or LAA-enabled mobiles devices have to be released first, and users have to buy those newer models to benefit from the technology. LTE/Wi-Fi Aggregation Unlike cellular services which utilize licensed spectrums, Wi- Fi service uses unlicensed spectrum in 5GHz, which is FREE. Although LTE can theoretically use up to 100 MHz of bandwidth (BW) by means of CA of 5 20MHz bands, the actual BW that an operator can obtain is far less than that. On the other hand, Wi-Fi can use quite a wide range of BW, up to hundreds of MHz. Wi-Fi BWs vary depending on nations. For example, Korea has about 500MHz while the USA has more - about 700MHz. Wi-Fi has evolved to IEEE 802.11 a/b/g/n, and currently IEEE 802.11ac (80MHz@5GHz, 2 Wi-Fi antenna at phone) which supports 866Mbps is commercially available. MU-MIMO is expected to be commercialized soon, and Wi-Fi is evolving even further, outperforming the speed of LTE-A. Besides, Wi- Fi AP can be easily installed and deployed by anyone as well as operators, so Wi-Fi AP has become available everywhere - at home, office, municipal, etc. Most LTE-enabled phones today are Wi-Fi friendly. Recently, there have been attempts to seek a way to achieve both lower costs and higher speeds at the same time by combining this free and amazingly fast Wi-Fi, with LTE. Efforts have been made to steadily improve network capacity and user speeds by minimizing investment costs (licensed spectrum costs) through cost-efficient combination of the two. LTE-U/LAA One of the most discussed solutions designed to serve the purpose is LTE-U/LAA. Like LTE-A CA combines licensed bands, LTE-U/LAA combines licensed LTE bands with unlicensed 5GHz bands (i.e. LTE MAC and PHY over unlicensed band). It causes no spectrum cost issue, but co- existence issues (fairness, regulation, etc.) still remain controversial and unsolved. LAA, designed to address such co-existence issues by applying Listen-before-talk (LBT) to LTE, is still under review for standardization, and not quite ready for commercialization yet. LTE-U/LAA Introduction Globally, 4G LTE service has steadily gained popularity since its launch in around 2010, making smartphones the bare necessities of our everyday life. High performance smartphones equipped with new features, some with multimedia processing capability (2160p@30fps) as good as PC, are being released every year. Thanks to the popularity of such high performance devices, contents like video, music, photo, etc. are getting bigger and larger as well. In the beginning, download speeds on mobile devices were just around 75Mbps. Then with operators’ additional purchase of LTE spectrums and introduction of LTE-A Carrier Aggregation, they have jumped up to 150Mbps (20MHz) and 225Mbps (30MHz). Finally, recent commercialization of 3-band CA (40MHz) further upgraded the speeds up to 300Mbps. All the new trends together have caused, and will continue to cause, drastic growth of data traffic across operators’ networks in the market. Cisco recently forecasted that global mobile data traffic will increase tenfold between 2014 and 2019. In response to soaring traffic, operators have attempted to secure more LTE bands through spectrum auctions. Because of stagnated mobile ARPU these days, however, operators are now facing a burden of tremendous spectrum costs, which would be easily over millions of dollars. Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 15 Vendor Solution Dr. Byungchun Jeon CEO, Netvision Telecom Dr. Harrison J. Son Chief Analyst and CEO, Netmanias 0 20 40 60 80 100 120 140 160 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 2012 2013 2014 2015 3G (WCDMA) 4G (LTE) 0 5,000 10,000 15,000 20,000 25,000 30,000 2014 2015 2016 2017 2018 2019 149 PB (97.4%) 3.8 PB (2.6%) [PB/month] 2012 2013 2014 2015 [PB/month] (a) Global mobile traffic forecast (Cisco VNI 2015) (b) Mobile traffic growth in Korea Figure 1. Mobile data traffic explosion Figure 2. Aggregation technologies LTE eNB (3GPP) UE Multipath TCP Path Aggregation Native Wi-Fi AP (802.11@5GHz) 802.11 LTE EPC 1.8G 5G Native Wi-Fi AP (802.11@5GHz) 802.11 5G MP Proxy (IETF) LTE eNB (3GPP) UE LWA Link Aggregation Wi-Fi AP (LWA@5GHz) Native Wi-Fi AP (802.11@5GHz) 802.11 802.11 LTE EPC 1.8G 5G 5G GE EPC LTE eNB (3GPP) LTE-A Carrier Aggregation UE 1.8G 2.1G LTE eNB (3GPP) UE LTE-U/LAA Carrier Aggregation Small RRH (LTE-U/LAA@5GHz) Native Wi-Fi AP (802.11@5GHz) LTE 802.11 LTE EPC Contention 1.8G 5G 5G CPRI or GE
  17. 17. No Touch on Existing NW Infrastructure Earlier this year, Korean operators, KT, SK Telecom and LG U+, launched 3-band CA service supporting up to 300Mbps. They are currently testing LTE-U and LWA that would offer even higher speeds, 450Mbps ~ 600Mbps. However, because of issues like technological immaturity, co-existence with existing Wi-Fi, and of course the burden of enormous investment cost required for replacement of existing LTE and Wi-Fi equipment, the technology still has not been commercialized. Under the circumstances, in June, KT launched GiGA LTE service that theoretically supports 1.17Gbps by means of 3- band LTE-A and GiGA Wi-Fi aggregation utilizing MPTCP, opening a mobile giga era for the first time in the world. With the launch, the MPTCP technology was recognized as the most feasible technology that can be immediately deployed and commercialized across the nationwide network of the nation at the minimum costs. Application- or User-specific Policies - More Chances to Create Profits Operators can set various user- and application-specific MPTCP policies as they want. They can apply MPTCP to all applications accessed by users, or to certain application services only. For instance, operators can apply MPTCP to their mobile video services to offer uninterrupted video service to their customers, ensuring greater service satisfaction. Or they can apply it to OTT video service provided by their partners (e.g. OTT, e-trading, etc.) to create a new profit model with B2B revenue. In this type of profit model, partners can share their profits with operators in return of the operators’ provision of fast and reliable contents service (combined aggregation path of LTE and Wi-Fi). Or operator can even commercialize MPTCP service itself, and apply it to their customers with a plan of specific rates or higher only, generating additional profits (B2C revenue) and thereby improving ARPU. No replacement or modification is required in existing networks. So, this solution can be deployed over any existing commercial networks immediately. This solution makes both users and operators happy – a true win-win situation. Users can download contents through multiple TCP sessions via both LTE and Wi-Fi, which theoretically means data can be downloaded at the sum of their maximum speeds (LTE and Wi-Fi combined). What’s even better is that even in case of Wi-Fi congestion in Wi-Fi hot spots, users can still be served uninterruptedly through LTE. Operators are happy because they can provide affordable, differentiated high speed download service, attracting new customers and reaffirming existing customers’ loyalty. Also, they can leverage their existing LTE and Wi-Fi infrastructure with no change or addition, investment in building infrastructure for accelerated speeds can be kept minimum. They can also decide which applications they want to apply MPTCP to, and adjust traffic ratios of LTE and Wi-Fi, giving operators to offer different services and plans. Boost Download Speeds through LTE/Wi-Fi Aggregation Most smartphones today come with both LTE and Wi-Fi modems, but the two modems do not work simultaneously. That means only one modem, either LTE or Wi-Fi, can work at once. The biggest benefit of MPTCP is that it aggregates two paths for LTE and Wi-Fi, and so data can be downloaded at the combined rates of LTE and Wi-Fi. So, for example, if LTE supports 300Mbps and Wi-Fi supports 866Mbps, theoretically maximum download speeds can be 1.17Gbps. Another benefit of MPTCP is that it enables operators to use not only their own LTE and Wi-Fi, but also unmanaged Wi-Fi, such as user-deployed, public, or office Wi-Fi, when aggregating. In other words, they can access any Wi-Fi APs available to users in addition to their own APs. Also, with MPTCP, operators can cut down costs of spectrum as well as investment costs in small cells (Wi-Fi AP). LTE/Wi-Fi Link Aggregation (LWA) With LWA, Wi-Fi runs over unlicensed bands while LTE runs over licensed bands. At eNB (BBU in case of C-RAN), LTE traffic is separated by PDCP or RLC layer. Then, some of them are transmitted through LTE via a RRH and the rest are sent through Wi-Fi via a Wi-Fi AP (802.11 MAC and PHY over unlicensed band). Unlike LTE-U/LAA, it causes no fairness issue with Wi-Fi. But, it is also under review for standardization, and quite not ready for commercialization yet. Again, LWA requires a considerable CAPEX because existing operators' Wi-Fi APs have to be replaced with LWA- aware APs and the existing Wi-Fi APs everywhere (operator- deployed Wi-Fi and user-deployed Wi-Fi) will not be used. LTE/Wi-Fi Path Aggregation LTE/Wi-Fi path aggregation based on Netvision Telecom’s Multipath TCP (MPTCP) works differently as it is designed to aggregate multiple flows of data on transport layer. Due to this design, it can immediately aggregate LTE and Wi-Fi and improve speeds drastically simply by adding MPTCP gateway and SW upgrade on mobile device, without having to replace any part of existing infrastructure (LTE, Wi-Fi and IP infrastructure). Another benefit is that it, unlike LTE-U/LAA, eliminates the controversial fairness issues between LTE and Wi-Fi. LTE/Wi- Fi path aggregation is the most cost-efficient LTE/Wi-Fi integration solution as it allows an operator to expand network capacity by using existing Wi-Fi networks (operator- deployed Wi-Fi and user-deployed Wi-Fi). Netvision Telecom's Multi-Path Aggregation Solution (MPASTM ) Multi-Path Aggregation Solution (MPAS)TM is an LTE/Wi-Fi path aggregation solution based on MPTCP developed by Netvision Telecom. MPAS consists of i) MPAS app, ii) MP-GW (MPTCP proxy gateway), and iii) MP-Manager in charge of managing MP-GW and providing service policies to UE. Unlike other LTE/Wi-Fi aggregation solutions that require installing of new LTE-U/LAA or LWA enabled small cells and replacement of user mobile devices, MPAS gives immediate enhancement of download speeds just through upgrading SW on mobile devices and adding MP-GW. Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 16 Vendor Solution
  18. 18. 0 10 20 30 40 50 60 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 75 150 150 225 300 1,166 500 0 200 400 600 800 1,000 1,200 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016 # 1 # 1 # 1 # 1 # 1 2012 2013 20142011 2015 2016 Wi-Fi(866) Mbps LTE-A Wideband LTE Wideband LTE-A 3-Band LTE-A MPTCP (LTE+WiFi) LTE Pro-A (3-Band LTE-A + 256QAM) LTE 0 10 20 30 40 50 60 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 3G 4G (73.4%, 2016 Q2) 2G 07 08 09 10 11 12 13 14 15 16 Korea, the Hottest Mobile Market in the World Mobile Connections by Technology Generation Source: MSIP, KT, SK Telecom, LG U+ 2016 Q22016 Q2 2G 4.0M 3G 12.0M 4G 44.1M (73.4%) Total 60.1 4.0M 12.0M 44.1M Million 07 08 09 10 11 12 13 14 15 3G Peak 2G Peak 4G 16 Million Mobile Connections by Device Type [2016 Q2] Smartphone 45.2M 75.2% Feature phone 9.1M 15.1% IoT Device 4.8M 8.0% Others 1.0M 1.7% Total 60.1M 100% Feature phone IoT device Others Mobile Connections by Technology Generation 2G 4.0M 6.7% 3G 12.0M 19.9% 4G 44.1M 73.4% Total 60.1M 100% [2016 Q2] 4G: 73.4% 2G 6.7% 19.9% 3G 60.1M Smartphone: 75.2% 60.1M 15.1% 8.0% # 1 World’s First Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 17 Market Data
  19. 19. Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com KT Revenue 0 50 100 150 200 250 300 350 400 450 0 1 2 3 4 5 6 7 8 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013 2014 2015 2016 24 26 28 30 32 34 36 38 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016 KT - 2 4 6 8 10 12 14 16 18 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016 390 400 410 420 430 440 450 460 470 480 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 - 1 2 3 4 5 6 7 8 9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 1,350 1,400 1,450 1,500 1,550 1,600 1,650 1,700 1,750 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016 KT Source: MSIP, KT 20162012 2013 2014 2015 [KRW Bn] KT LTE Connections KT Giga Internet Subscribers MNO Million 2012 2013 2014 2015 2016 20162012 2013 2014 2015 [x1000 KRW] Launched LTE service (2012.01) KT Mobile ARPU KT Mobile Service Revenue Quarterly earnings MNO MNO KT Internet Revenue [KRW Bn] Quarterly earnings Q3 Q4Q1 Q2 2015 Q3 Q4Q1 Q2 2014 Q1 Q2 2016 Q3 Q4Q1 Q2 2015 Q3 Q4Q1 Q2 2014 Q1 Q2 2016 Total Mobile Connections LTE Connections Giga Internet Subscribers Total Internet Subscribers Million 1.7M YOY: 285.7% 8.4M 15.4M 12.9M YoY: 13.3% Launched Giga Internet service (2014.10) KT TV Revenue (IPTV + Satellite TV) Million IPTV Subscribers [KRW Bn] TV Revenue 20162012 2013 2014 2015 By Q2 of 2016, the Giga Internet subscription reached 1.7 million, which accounts for 20% of the company's Internet service subscription (8.4 million). By Q2 of 2016, the LTE subscription reached 12.9 million, which accounts for 83.8% of the company's mobile service subscription (15.4 million). 480 [KRW Bn] YOY: 12.03% 36,527 [KRW] YOY: 1.3% 1,663 [KRW Bn] YOY: 2.0% 411 [KRW Bn] YOY: 15.6% Quarterly earnings ARPU stagnation: switching to more affordable phones and plans Mobile service revenue growth thanks to an increase in LTE subscription, which has a higher ARPU than 3G Internet revenue growth thanks to an increase in Giga Internet subscription, which has a higher ARPU than 100Mbps service. TV revenue growth thanks to an increase in IPTV subscription. 18
  20. 20. 0 2 4 6 8 10 12 14 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 20152008 2009 2010 2016 2008.11 Live IPTV Service IPTV Subscribers: 6.8M Quarterly earnings: 411 [KRW Bn]* * including Satellite TV (KT Skylife) revenue Broadband Subscribers: 8.4M Quarterly earnings: 480 [KRW Bn] LTE Subscribers: 12.9M 2013.12 Launch FHD Service 2014.09 Launch UHD Service Launch Giga Internet service 2014.10 (500Mbps, 1Gbps) 2007: FTTH (E-PON) 100Mbps KT BB, IPTV and LTE Services Innovation 2012.01 LTE (75Mbps) Service 2014.06 Wideband LTE-A (225M) Service 2015.01 3-Band LTE-A (300M) Service 2013.09 Launch LTE-A(150M) Launch Wideband LTE (150M) Mobile Subscribers (3G+LTE): 15.4M Quarterly earnings: 1,673 [KRW Bn] KT TV 2015.07 Launch HDR Service Subscribers [Million] 2014.01 Launch eMBMS service 1 1 1 1 2016.03 IoT network commercialized (LTE-M) 1 1 1 1 2015.06 Giga LTE (LTE+WiFi Aggregation) (1.17G) Service Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 19 KT Innovation History
  21. 21. 850 MHz 900 MHz 1800 MHz 2600 MHz Band 5 Band 8 Band 3 Band 7 1745 1755 KT 1725 17351715 SKT KT 2520 2530 2540 LG U+ MHz 905 915 KT 839 849 LGU+ 829 SKT 884 894 Downlink UE Carrier Aggregation (CA) Uplink n Carrier aggregation services in Korea (August 1, 2016) 2-band 2-band 3-band 30 (20 + 10) MHz 40 (20 + 20) MHz 50 (20 + 20 + 10) MHz 2-band 2-band 3-band 20 (10 + 10) MHz 30 (20 + 10) MHz 40 (20 + 10 + 10) MHz 2-band 2-band 3-band 20 (10 + 10) MHz 30 (20 + 10) MHz 40 (20 + 10 + 10) MHz 1.8/2.1 GHz (B3/B1) + 850 MHz (B5) 1.8 GHz (B3) + 2.1 GHz (B1) 1.8 GHz (B3) + 2.1 GHz (B1) + 850 MHz (B5) 850 MHz (B5) + 2.1 GHz (B1) 2.6 GHz (B7) + 850 MHz/2.1 GHz (B5/B1) 2.6 GHz (B7) + 850 MHz (B5) + 2.1 GHz (B1) 2.1 GHz (B1) + 900 MHz (B8) 1.8 GHz (B3) + 2.1 GHz/900 MHz (B1/B8) 1.8 GHz (B3) + 2.1 GHz (B1) + 900 MHz (B8) 225 Mbps 300 Mbps 375 Mbps 150 Mbps 225 Mbps 300 Mbps 150 MHz 225 Mbps 300 Mbps Operator LTE-A Bandwidth (DL)Carriers Max. rate (DL) Cat-3 Cat-4 100 Mbps (Wideband LTE, 20 MHz) 150 Mbps (Wideband LTE, 20 MHz) 150 Mbps (LTE-A, 2-band CA, 10+10 MHz) SKT 300 Mbps (Wideband LTE-A, 2-band CA, 20+20 MHz)Cat-6 LG U+ KT 30 MHz: [B3]20 + [B5]10 30 MHz: [B7]20 + [B1/B5]10 30 MHz: [B3]20 + [B1/B8]10 225 Mbps 2-bandCat-6 LG U+ 20 MHz: [B1]10 + [B5]10 150 Mbps2-bandCat-4 SKT LG U+ KT 50 MHz: [B1]20 + [B3]20 + [B5]10 40 MHz: [B1]10 + [B5]10 + [B7]20 40 MHz: [B1]10 + [B3]20 + [B8]10 3-bandCat-9/10 UE Category Max. Speed (DL) Operator UE Category CA Type BW: CA Combination Max. Speed SK Telecom 375 Mbps (3-band LTE-A, 3-band CA, 20+20+10 MHz)Cat-9/Cat-10 1930 SKT 1940 2100 MHz Band 1 1920 LGU+ KT 1950 1970 LG U+ KT MHz MHz 1810 MHz 2640 2650 2660 LG U+ KT 2150 2160 data rate [bps] 1830 960 1850 874 1820 SKT LGU+ 2110 2120 2130 SKTLGU+ KTSKT KT Major 1960 2140 1840 SKT MHz 950 40 MHz: [B3]20 + [B1]20 300 Mbps 300 Mbps 375 Mbps KT 20 MHz: [B1]10 + [B8]10 LTE/LTE-A commercialization by South Korea’s big 3 operators July 30 Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 20 4G LTE
  22. 22. 1 2 3 4 5 6 7 8 9 10 11 12 7 8 9 10 11 12 1 2 3 4 5 6 7 8 10 11 12 1 2 4 5 7 8 9 10 11 12 3 6 2 4 5 6 9 7 8 x1 x2 x2 x3 x4 x5 + 256QAMTri-band LTE-A Tri-band LTE-A Wideband LTE-A Wideband LTE 20+20+20MHz 20+10+10MHz 20+10MHz 20MHz Max 225Mbps Max 150Mbps LTE-A LTE 10+10MHz 10MHz Max 150Mbps Max 75Mbps Commercialized (by all 3 in June 2014) Commercialized (by all 3 in 2013) Commercialized (by all 3 in 2013) Commercialized (by SKT/LG U+ in 2011 and by KT in 2012) Max 450Mbps Max 300Mbps Commercialized (by SKT in June 2016) Commercialized (by all 3 in January 2015) 1 World’s first LTE/LTE-A/LTE-A Pro commercialization by South Korea’s big 3 operators June 06 Korean Communication Review | August 2016 © 2016 Netmanias • www.netmanias.com 21 4G LTE • Launched LTE-A (150Mbps) • VoLTE (World’s first) • World’s first full HD streaming • Launched Wideband LTE (150Mbps) • Launched LTE (75Mbps) service • LTE subscribers: 12.3 M (45.1%) • LTE subscribers: 7.5 M (27.9%) • LTE subscribers: 634 K (2.4%) 10MHz (850MHz) + 10MHz (1.8GHz) 10MHz (850MHz) • LTE subscribers: 13.5 M (49.3%) • MWC 2013 Demonstration - CA (10+10MHz, 150Mbps) • Wideband LTE-A (20+10MHz, 225Mbps) demonstration • LTE subscribers: 1.8 M (6.7%) 20MHz (1.8GHz) • Launched LTE-A (150Mbps) • Multi-Carrier (World’s first) • World’s first 4 CH multi-view • Launched Wideband LTE (150Mbps) • LTE subscribers: 6.5 M (61.1%) • LTE subscribers: 4.1 M (43.1%) • LTE subscribers: 557 K (5.9%) 10MHz (850MHz) • Launched LTE (75Mbps) service • VoLTE (World’s first) • LTE subscribers: 7.1 M (65.2%) • LTE subscribers: 1.8 M (15.5%) 10MHz (850MHz) + 10MHz (2.1GHz) 20MHz (2.6GHz) • HD 4Mbps streaming • Multi-Carrier • Launched LTE (75Mbps) service • VoLTE • Launched Wideband LTE (150Mbps) • LTE subscribers: 7.9 M (47.9%) • MWC 2013 Demonstration - eMBMS (KT+Samsung+Qualcomm) • LTE subscribers: 351 K (2.1%) 10MHz (1.8GHz) + 10MHz (900MHz) 20MHz (1.8GHz) • Multi-Carrier (World’s first) 1 1 2 1 1 1 10MHz (1.8GHz) • Launched LTE-A (150Mbps) 3 • Launched 3-band LTE-A (300Mbps) (available for all subscribers) • Launched unlimited LTE data plan • Expanded Wideband LTE to metropolitan cities • MWC 2014 Demonstration - 3-Band CA (20+20+20MHz, 450Mbps) - Uplink CoMP - LTE + Giga Wi-Fi Femtocell • LTE subscribers: 7.5 M (68.6%) • Launched eMBMS (World’s first) • Launched unlimited LTE data plan • Expanded Wideband LTE to metropolitan cities • MWC 2014 Demonstration - 3-Band CA (20+20+20MHz, 450Mbps) - LTE-A CA Femtocell - FDD-TDD LTE CA - LTE-A + GiGA Wi-Fi • LTE subscribers: 8.6 M (52.4%) 20MHz (2.6GHz) + 10MHz (850MHz) 20MHz (1.8GHz) + 10MHz (900MHz) 20MHz (1.8GHz) + 10MHz (900MHz) + 10MHz (2.1GHz) • Launched 3-band LTE-A (300Mbps) (available for all subscribers) • Launched Wideband LTE-A (225Mbps) • Launched Wideband LTE-A (225Mbps) 20MHz (1.8GHz) + 10MHz (850MHz) + 10MHz (2.1GHz) 2 2 1 20MHz (2.6GHz) + 10MHz (850MHz) + 10MHz (2.1GHz) • Launched 3-band LTE-A (300Mbps) (available for all subscribers) • Launched eICIC • MWC 2015 Demonstration - DL CoMP (Dynamic Point Selection) - DL 256QAM (400Mbps) • MWC 2015 Demonstration - mmWave System (28GHz, 7.5Gbps) - NFV/SDN Orchestration - Fast Data Flatform - Quantum Cryptography System 11 2 1 • Expanded Wideband LTE to metropolitan cities • MWC 2014 Demonstration - 3-Band CA (20+20+20MHz, 450Mbps) - LTE-A CA Femtocell - FDD-TDD LTE CA • LTE subscribers: 14.9 M (53.1%) • Launched unlimited LTE data plan • Launched Wideband LTE-A (225Mbps) 20MHz (1.8GHz) + 10MHz (850MHz) 1 1 • GiGA LTE: Integration of LTE and WiFi using MP-TCP GW (1.17Gbps) - 3-band CA + GiGA WiFi 1 • vIMS commercialized • Launched inter-operator VoLTE • Launched ThingPlug (open IoT platform based on oneM2M) • Launched Smart Home (Home IoT) • Lunched “UO”, lifeware brand • Launched IoT@Home (Home IoT) • vEPC for IoT commercialized • Launched inter-operator VoLTE 11 • Launched inter-site CA • band LTE WiFI: LTE + WiFi (1.17Gbps) • Giga Multi-Path WiFi: LTE + WiFi (1.17Gbps) LG U+ KTSK Telecom 6 3 • MWC 2016 Demonstration - mmWave System (28GHz, 20Gbps) - Multi-Link Solution - LoRa based LPWA - Connected Car Solution: T2C • MWC 2016 Demonstration - mmWave System (28GHz, 20Gbps) - VR station - 5G Service: Sync-View • 2.1 GHz 20MHz (DL+UL) acquired• 2.6 GHz 60MHz (DL+UL) acquired • 1.8 GHz 20MHz (DL+UL) acquired • Launched LTE-A Pro (500Mbps) - 256QAM with 3-band CA (50MHz) • Nationwide LoRa Network • Launched Enterprise LTE 1 • Nationwide LTE-M network commercialized (Cat.1 + PSM) • Nationwide LTE-M network commercialized (Cat.1 + PSM) 1 1 • Launched LTE-A Pro (400Mbps) - 256QAM with 3-band CA (40MHz) • Launched inter-operator VoLTE 1 • MWC 2015 Demonstration - mmWave System (28GHz, 7.5Gbps) - LTE-HetNet (LTE+WiFi, 600Mbps) - LTE-Unlicensed (450Mbps) - Triple Mode Femto • LTE subscribers: 6.8 M (41.8%) Wideband LTE Spectrum Auction LTE Spectrum Auction for 700 MHz, 1.8 GHz, 2.1 GHz and 2.6 GHz • Launched 3-band LTE-A (300Mbps) (available for 100 subscribers only) 3 1 10 11 12 1 5 2 H2 4 11 12 13 14 15 16 9

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