ASIA

Korea : At SK Telcom's Board of Directors' meeting on August 31, a decision was made to expand investment to develop the WCDMA business, a 3.5G asynchronous mobile phone service, and to deploy a nationwide. HSDPA network.

Through the Board of Directors' meeting, SK Telecom has decided to add an additional KRW 240 billion in 2006 investments in HSDPA, and complete the expansion of the nationwide network by the first half of 2007. Consequently, SK Telecom's total investment in HSDPA this year increases from KRW 570 billion to KRW 810. However, the Company revealed that since the additional investment of KRW 240 billion is to be procured through investment cost savings resulting from limiting existing CDMA network investments to essential areas and adjusting investment priorities, there would be no change in the total capital expenditure for 2006 of KRW 1.6 trillion.

Such a decision by SK Telecom is one step forward from the existing strategy of deploying the HSDPA networks in 84 cities by the end of October this year and expanding the market through DBDM (dual-band dual-mode; uses both 800MHz and 2GHz frequencies) handsets.

SK Telecom remarked that the DBDM handsets supporting HSDPA lacked competitiveness compared to the existing 2G handsets in terms of width, design and price, resulting in higher marketing costs, and that there were limitations in promoting the 3.5G mobile phone market. The strategy is to release SBSM (single-band single-mode; 2GHz frequency exclusive) during the first half of next year when the nationwide network is deployed in order to continue acquiring market leadership in the WCDMA market.

Also, the Company plans to expand global synergy with prominent overseas businesses such as overseas roaming, global content and solutions, and concentrate its competency so that HSDPA may acquire differentiation as a next-generation mobile communications service.

Also, with the nationwide deployment of the HSDPA network, SK Telecom plans to maximize synergy through an appropriate portfolio strategy among networks including the existing 1X, EV-DO networks. Competitive advantage will be continuously maintained in the synchronous CDMA network (800 MHz) for voice and medium / low speed data, while the SBSM handset, which is cheaper than the DBDM handset, will be used to position the asynchronous HSDPA network (2 GHz) to provide advanced data and communications services to customers.

Going forward, SK Telecom plans to establish HSDPA, a 3.5G mobile phone, into a service based on four concepts to pursue sophistication of services:
1) "Visual concept", focusing on high quality video calls, customer-participating content and mobile game upgrade;
2) "Internet concept", by expanding Internet direct access services and linking with fixed line content;
3) "Global concept", centered around automatic roaming services;
4) "Convenience concept", focused on transportation cards, mobile banking, credit card settlements.

Bang-Hyung Lee, executive vice-president and head of SK Telecom's Business Group, remarked "In order to cope with the rapid evolution of technology and diverse convergence services, it is necessary to provide diverse services that adhere to consumer needs and product purposes, through on optimum combination of several network technologies. SK Telecom is leading the development of the 3.5G market, being the first in the world to launch HSDPA handsets, one step forward from WCDMA, in mid-May, and by completing the deployment of the nationwide network by the first half of next year, we will provide HSDPA services with no inconveniences or disconnections to satisfy our customers."

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