Evolution to 3G :
Financial and Technical
Perspectives
March 29, 2000
Myungsoon Park
SK Telecom
Contents
1. SK Telecom and Korean Wireless Market
2. 2G Network Architecture
3. IS-2000 Network
1.
Objectives & Benefits, Market Forecasting, etc
4. Network Evolution Plan
1.
Evolution Scenario, Rollout Plan, etc
5. Summary
2
SK Telecom
 17 years of cellular and paging operation
 CDMA commercial service in Jan. 1996
 World’s largest CDMA cellular service provider
 Subscriber base (as of Feb, ‘00)

Cellular : 10.2M
 Operation scale (as of Feb, ‘00)

Cellular : over 40 MSCs, over 3,000BTSs
 Subsidiary

SK Teletech : Mobile & multimedia handsets manufacturer

SK Telink : International call service

Netsgo : Internet service provider
 Strategic allianceship with STI
3
Korean Cellular Penetration
SKT’s Subscribers
Korean Cellular Penetration
[%]
(‘000)
Cellular Penetration surpass
Fixed line in Aug. 99
12,000
12000
2,000
60
10,000
10000
50
Fixed line
8000
4,034
40
30
4,571
Cellular
4000
20
2,891
1,680
1996
1997
1,395
2000
10
0
1996
5,966
6000
0
1997
1998
1999E
2000E
1998
1999
2000E
4
CDMA Operators in Korea
Samsung
LGIC
Hyundai
Lucent
Motorola
Samsung
LGIC
Hyundai
SK Teletech
Hanhwa
Maxson
Appeal
SK Telecom
Shinsegi Telecom
KT Freetel
Hansol
LG Telecom
Infrastructure Vendors
Operators
Handset Manufacturers
(Dec 1999)
CDMA(Cellular)
CDMA(PCS)
Total
Operator
SKT
STI
KTF
HS
LGT
Subs.
(thousand)
10,110
3,238
4,267
2,741
3,085
Systems
LGIC
Samsung
Hyundai
Samsung
Hyundai
Lucent
Samsung
Motorola
(Daewoo)
Samsung
Lucent
LGIC
23,441
Source : SK Telecom
5
2G Network Architecture
Intelligent Network &
VAS
VMS
E1
PPS
VPN
IS41
LG
Samsung
AUC
Hyundai
PSTN
R2
T1/E1
E1
ITU-T
IS41/ISUP
E1
ITU-T
ITU-T
STI/PCS
ISUP
IS41
STP
IS41/ISUP
HLR
T1/E1
CDMA (IS-95A/B)
LAPD
SMS
External
Networks
Cellular Network
Iridium
GSM
World
UWCN
IS41
World
ITU-T
IS41
IS41
IS41
CDMA (IS-2000)
International
Roaming
IP
E1
ISUP
Paging Network
RFC
Under development
POCSAG
FLEX
IWF
TCP/IP
TCP/IP
NMS
RTMS
FMS
PMS
COIS
CMS
TMS
CD
Billing
6
IS-2000 Network
 IS-2000 Network

Objectives & Benefits

Market Forecasting

Financial Value

Rollout Plan

Network Configuration

2G Interworking
7
Objectives & Benefits
 Objectives

Secure data market leadership

Cost effective network investment
– Capacity : larger than IS-95A/B
– Compact : more reliable and better quality system

Enhanced quality & service capability
– Standby time, enhanced features
 Benefits

First mover into high speed wireless data market

Smooth migration to 3G network (IMT-2000)
8
Market Forecasting
SKT’s Cellular Penetration
Thousand
Subscribers
 Market trends
16,000
Total subscribers
14,000

Penetration almost saturates

Wireless internet & data
market will supercede voice
12,000
10,000
95A
 Subscribers requirements
8,000
6,000

various data services in
higher speed

lower price
IS-2000
4,000
95B
2,000
4Q
3Q
2Q
4Q
1Q
2003
3Q
2Q
4Q
1Q
2002
3Q
2Q
4Q
1Q
2001
3Q
2Q
1Q
2000
1999
4Q
0
9
Financial Value
Revenue Forcecasting
 Profit Value
Revenue : $Mil
1,600

Total Expense : $1.2B

IRR : 28%

NPV : $520M
1,400
Total
1,200
1,000
Voice
800
 Assumptions
600
Data
400
200
Data market will supercede
voice

In 2002, IMT-2000 (3G phase 2)
service will be launched
2004
2003
2002
2001
2000
0

10
Rollout Plan
 System development
 Network implementation

Technical trial : ‘99. 9

Installation : ‘00. 6 ~ 8

Requirement : ‘00. 1

Optimization : ‘00. 9

Pilot test : ‘00. 4

Trial/commercial svc : ‘00. 10

Field test : ‘00. 6 ~ 9
Coverage
Cities/Towns
Highways (Km)
Coverage (% of Pop)
Total
2000
2001
2002
79/234
73%
100%
-
2,500
65%
89%
100%
-
75.3%
88.4%
100%
11
Network Configuration
SCP
SCE/SMS
SMSC
HLR
VMS/FMS
IP Fax
MT
BTS
PSTN
2G(95-A/B)
BSC
MSC/VLR
BSC
IP Phone MT
Notebook
MSC/VLR
BTS
IWF
PDA
Notebook MT
Maintenance
Console
Managed
WAN
Internet
PDSN
BTS
Gateway
Router
BSC
IP Fax
MT
IP Phone
IP Fax
BTS
IS-2000
RADIUS
Server
HA
12
2G Interworking
 Backward compatibility

Handoff
– 2G-3G soft handoff
– Data handoff : 2G->3G ,3G-> 2G

Roaming to 2G network
 Service differentiation depends on network

2G network : low speed data services (14.4k, 64k)
 1X network : high speed data services(144k)
– Packet mode : fast internet accto for N-generation
13
Network Evolution Plan
 Network Evolution Plan

Evolution Scenario

Rollout Plans

3G System Technology

3G Network Deployment Strategy

3G Network Architecture
14
Evolution Scenario to 3G
2G Network
(IS-95A/B)
3G Network
(phase 1)
(IS-2000)
3G Network
(phase 2)
(IMT-2000)
 Reduce technological risks by phased enhancement of
network and services
 Avoid uncertainties for 3G service market
 Provide medium rate data services and create higher
rate data service need with 3G phase 1 network
15
Rollout Plans
Jan 1996(IS-95A)
Aug 1999(IS-95B)
2000 4Q
2002 2Q
2G Network
(IS-95A/B)
2G Network
(IS-95A/B)
2G Network
(IS-95A/B)
3G ph.1 Network
(IS-2000)
3G ph.1 Network
(IS-2000)
3G ph.2 Network
(IMT-2000)
2G
2G
2G
2G
2G
2G
3G
3G
ph.1
ph.1
2G
3G
3G 3G
ph.1 ph.2 ph.2
16
3G System Technology
IMT-MC
IMT-DS
MSC
MSC
Evolved GSM
Evolved ANSI-41
 Evolved from existing
CDMA technology
 Complementary
method of MC and DS
 Advantage in global
roaming
 IMT-MC to build upon IS-2000 network
 DS-41 system to bridge existing CDMA technology with IMT-DS
17
3G Network Deployment Strategy
2GHz
800MHz
IS-95C
System
2GHz
IMT-MC
IMT-DS
BTS
BTS
BSC
HA
PDSN
MSC/
VLR
Gateway
Router
WAN
ANSI-41 MAP
HLR
IWF
RADIUS
Server
O&M Server
 Minimize IMT-2000 investment cost by deploying IS-2000 network
capable of supporting IMT-MC/DS
 Expand IMT-2000 upon IS-2000 core network to ensure call quality
18
3G Network Architecture
Develop core technology
MS
MSC
MSC
BTS
Voice
Network
PSTN
BTS
Internet
Data
Network
HA
PDSN
RNC
MS
GMSC
HLR
RNC
MS
2G
Cellular
BTS
RADIUS
Server
Server
DNS
Directory
Service
Platform
IMMC
Portal
Web ...
19
Summary
 Benefits of IS-2000

Marketing
– Secure data market leadership

Technical
– Enhanced quality and service capability

Financial
– Cost effective network investment

Network evolution
– Smooth migration to IMT-2000
20