Company Presentation

http://www.sktelecom.com

October 2000

2SK Telecom

Table of Contents

1.1. Market OverviewMarket Overview

2.2. Wireless data MarketWireless data Market

3.3. Issues & StrategyIssues & Strategy

4.4. Investment HighlightsInvestment Highlights

3SK Telecom

Table of Contents

Market OverviewMarket Overview

Wireless data MarketWireless data Market

Issues & StrategyIssues & Strategy

Investment HighlightsInvestment Highlights

4SK Telecom

Korean Cellular Penetration

[%]

Cellular Penetration surpassed Fixed line in Aug. 99

Cellular

Fixed line

0

10

20

30

40

50

60

1996.12 1997.12 1998.12 1999.12 2000.12E

5SK Telecom

(Unit: 1,000)

SKT & STI’s SubscribersSKT & STI’s Subscribers

3,238 3,4102,891

4,571

2,136

1,125290

10,83010,077

5,966

0

2000

4000

6000

8000

10000

12000

1996 1997 1998 1999 2000(E)

STI SKT

Cellular Market

14,644(56.4%)7,774(29.9%)

3,557 (13.7%)

SK Telecom&Shinsegi

LG Telecom

KT Freetel&KT M.com

As of Sep 30, 2000(thousand)

Market ShareMarket Share

6SK Telecom

Trend on Call Composition

30.031.9

36.740.3

34.5

16

10.0

34.0

47.453.1

55.5

42.0

29.320.7 16.9

0

20

40

60

80

100

Dec 1996 Dec 1997 Dec 1998 Dec 1999 June 2000

(%)

Incoming call from PSTNIncoming call from PSTN

Call between Mobile OperatorsCall between Mobile Operators

Outgoing to PSTNOutgoing to PSTN

The mobile is getting more The mobile is getting more independent from fixed linesindependent from fixed lines

Wireless displacing Fixed line

7SK Telecom

SK Telecom’s Cellular Subscriber Trend

10,45810,886

11,26911,933 11,819 11,552 11,313 11,165 11,072

2.8

4.1

2.2

1.5

3.0

2.3

3.0

2.8

2.2

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

Jan 00 Feb 00 Mar 00 Apr 00 May 00 Jun 00 Jul 00 Aug 00 Sep 00

0

1

2

3

4

5

Cellular churn rate

(000) (%)

8SK Telecom

SK Telecom’s ARPU Trend

(Won)

(*) Excluding Interconnection among Mobile operators

32,72530,235 31,224 31,542 32,891 31,912

2,660 2,987 4,091428

294

5,989 5,8736,026

5,8636,090

5,943 6,4566,379

6,180

31,310 30,587

31,390

3081,408

254

2,937

0

10,000

20,000

30,000

40,000

Jan 00 Feb 00 Mar 00 Apr 00 May 00 Jun 00 Jul 00 Aug 00 Sep 00

call charge& monthly fee sign up fee Intercon(*)

9SK Telecom

Minutes of usage taking off

(%)MOU(Min)

0

40

80

120

160

Sep 99 Oct 99 Nov 99 Jan 00 Feb 00 Mar 00 Apr 00 May 00 Jun 00 July 00

0

2

4

6

8

10

MOU Growth rate vs. previous year

10SK Telecom

Table of Contents

Market OverviewMarket Overview

Wireless data MarketWireless data Market

Issues & StrategyIssues & Strategy

Investment HighlightsInvestment Highlights

11SK Telecom

6,001

2,888

1,057

282

1999 2000(E) 2001(E) 2002(E)

Korean Internet/E-commerce market growth

(Unit: Billion won)

Korean E-commerce marketKorean E-commerce marketKorean Internet UsersKorean Internet Users

16,030

10,860

3,103

1,634731366

1995 1996 1997 1998 1999 07- '00

(Unit: 1,000)

Source: Ministry of Information & CommunicationSource: Ministry of Information & Communication Source: International Data CorporationSource: International Data Corporation

12SK Telecom

n.Top performance

Apr 00 May 00 Jun 00 July 00 Aug 00 Sep 00 Dec 00(E)

ARPU 1,727 1,964 2,397 2,402 2,614 2,710 3,000# of

contents974 1,169 1,615 1,995 2,578 2,879 4,000

(000)

2,172

3,3593,603 3,626

3,900

1,468

2,7493,141 3,200

2,244

1,891

2,552

3,038

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Apr 00 May 00 Jun 00 Jul 00 Aug 00 Sep 00 Dec 00 (E)

# of handsets # of users

13SK Telecom

n.Top Growth potential

6,867

5,058

3,200

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2000.12(E) 2001.12(E) 2002.12(E)

n.TOP Users

(000)

Mobile UsageMobile Usage

- Penetration levels - Penetration levels > 50%> 50%

- Rapid adoption of new - Rapid adoption of new technology by Korean consumers technology by Korean consumers

- Increased demand for information - Increased demand for information at “any time, any place” at “any time, any place”

Data UsageData Usage

- High PC penetration- High PC penetration

- Rapid internet growth- Rapid internet growth

- Subscriber group is growing - Subscriber group is growing youngeryounger

High growth potential in Korean wireless data market

14SK Telecom

•

• Humor, Short Stories, Horoscope

• Cyber Events, Horserace, Quiz, Lottery Info.

• Banking : Money transfer, balance check• Credit card balance check, Stock Trading/Quotes• E-Lottery, Insurance, Real estate• Reservation/Ticketing, Shopping Mall, Travel• Department Stores

InfoNet BizNet

EntertaiNet MyNet

• Email, Contacts, Scheduling, Anniversary• Cyber Customer Center

n.TOP Service

• Launched : 1 Dec.’99 • Delivery technologies : WAP and online SMS• Access to 6 networks• Close interface with Web page (www.n-top.com)

• Location (Gas station, Banks/ATMs)• News / Sports / Weather• n.TOP community - Bulletin Board • Movie / Theater / Video • Search / Dictionary• College Info.

•

• Picture mate, animation Downloading / Messaging

• Games (including interactive games)

• LoveLink, Fashion, Fan Clubs, Shopping Mall

TTL n.TOP

• Business Information (Jobs, Tax, etc.)

• Trade

• Mobile Intranet

Biz n.TOP

15SK Telecom

n.TOP Usage Pattern & Trend

Substantial increase in n.TOP WAP usage per subSubstantial increase in n.TOP WAP usage per sub

- Double the Online-SMS Transaction Volume- Double the Online-SMS Transaction Volume

- Majority of new users use WAP based n.TOP- Majority of new users use WAP based n.TOP

Content PreferenceContent Preference

TOP5TOP5

SMSCommunity

27%Humor 16% Word

Game14%Quiz&Gifts 8%

Loc. App. 6%

WAP

Picture Mate34%

Chatting 14%

Quiz Game 14%

News/Humor 7%

Casino 6%

16SK Telecom

Table of Contents

Market OverviewMarket Overview

Wireless data MarketWireless data Market

Issues & StrategyIssues & Strategy

Investment HighlightsInvestment Highlights

17SK Telecom

The company has to meet the government 50% market share conditions. We will undertake this task with careful consideration to company value.

Marketing Marketing related actionsrelated actions

Reduced the advertising on television and completely

stopped advertising on major newspapers

Much of the promotional services have been eliminated

1) suspended sales promotion for activation

2) reinforced the criteria for involuntary deactivation

3) abolished the installment payment system on initial

subscription fee.

Reinforce the involuntary deactivation criteria

Meeting FTC Conditions

18SK Telecom

The IS-95C investment is essential to accommodate rapid growth in demand The IS-95C investment is essential to accommodate rapid growth in demand for wireless data servicefor wireless data service..

Market Market ExpectationExpectation

Due to handset subsidy ban, the number of IS-95C service

users this year is expected to be rather low, but we expect

the number to grow to about a million by the end of next year.

IS-95C system will be as competitive as IMT-2000 service in

its data transmission speed by the time IMT-2000 service is

scheduled to start in May, 2002.

Until the broad adoption of IMT-2000 service which is expected at

2005 or beyond, IS-95C can be a stepping stones to 3G service.

Service Service Coverage PlanCoverage Plan

1st stage: 2000.10~12 23 cities in 7 major metropolitan area 2nd stage: 2001.7 56 cities in the country

3rd stage: 2002.1 all major highways

IS-95C Service Launch

19SK Telecom

Number of licenses expected is 3, and service starting date will be May,Number of licenses expected is 3, and service starting date will be May, 2002 2002

Forming a consortium was encouraged by the government. Forming a consortium was encouraged by the government.

No points for entities which apply for the licenses on their own.No points for entities which apply for the licenses on their own.

The consortium will be formed to minimize the dilution of the The consortium will be formed to minimize the dilution of the

company value.company value.

ConsortiumConsortium

Licensing Licensing scheduleschedule

Application : October 2000 Completion : December 2000

Technology Technology StandardStandard

The government wants at least one entity to adopt

CDMA2000 as the standard.

- Two Licenses for W-CDMA, one for CDMA 2000

The company wants W-CDMA platform.

Investment/IMT-2000

20SK Telecom

Total amount 30% and no limit on investment per investorTotal amount 30% and no limit on investment per investor....

The company intends to participate in the process.The company intends to participate in the process. In the second In the second

roundround

In the first roundIn the first round

SKT acquired 2% of the company stake at the price of 33,000 won per share

Investment Investment objectiveobjective

To make savings in leased line expense To assure price competitiveness in wireless internet business. To secure reliable and dedicated network for IMT-2000 and

wireless data service. To compliment and increase usage of our existing back bone structure

Our ultimate aim is to have a reliable access to fixed line network which will compliment our growing wireless business

Investment/Powercomm

21SK Telecom

Integration with Shinsegi

SK Telecom and Shinsegi will explore coordination and integration SK Telecom and Shinsegi will explore coordination and integration

opportunities to maximize synergiesopportunities to maximize synergies

Network Roaming

- Offer roaming service to STI subscribers in less populated areas by - Offer roaming service to STI subscribers in less populated areas by

reprogramming their handsets from September of this year.reprogramming their handsets from September of this year.

- From January 2001, SKT will start dismantling STI base stations. - From January 2001, SKT will start dismantling STI base stations.

Co-investment

- A single IS-95C infrastructure will be made between the two networks.- A single IS-95C infrastructure will be made between the two networks.

NetworkNetwork

MarketingMarketing

Marketing coordination for branding, tariffs, handset policy, wireless data service and cross-marketing will be implemented

OtherOtherHuman resources policy will be coordinated to maximize the use of talents in both companies

22SK Telecom

Table of Contents

Market OverviewMarket Overview

Wireless data MarketWireless data Market

Issues & StrategyIssues & Strategy

Investment HighlightsInvestment Highlights

23SK Telecom

Investment Highlights

Well positioned for wireless internet servicesWell positioned for wireless internet services

Successful launch of wireless data service and market segmentation Successful launch of wireless data service and market segmentation strategystrategy

Prior occupation for wireless data service by launching IS-95CPrior occupation for wireless data service by launching IS-95C

The pre-eminent wireless operatorThe pre-eminent wireless operator

# 1 brand image and call quality# 1 brand image and call quality

Highest quality subscriber (ARPU, MOU, Collection rate, etc)Highest quality subscriber (ARPU, MOU, Collection rate, etc)

Weakened competitive environmentWeakened competitive environment

Reduction in marketing expensesReduction in marketing expenses

Extensive synergies to be realized from acquisition of STIExtensive synergies to be realized from acquisition of STI