Ki-young, Ko｜ 2013. 9. 24

Opportunities for BB Connectivity in APAC

Case Study - Korea

0 Introduction

1 International Internet Traffic Trend

2 KT Plan to Cope with the Traffic

3 Highway Construction & Telecom Infrastructure

4 Considerations

01 International Traffic Trend

Regional Traffic Growth Rate

2006 2007 2008 2009 2010 2011 2012 2013

Africa

Europe

US&Canada

Latin America

Asia100%

80%

60%

40%

20%

120%

140%

Telegeography

2009 2010 2011 2012 2013

Global Traffic

120

100

80

60

40

20

0

Int’l Internet Bandwidth(Tbps)

Traffic is growing but growth rate is slowing down, so is the Asian Region

60% 33%

28% 19%

6%

02 International Traffic Forecast Growing but the growth rate is slowing down, without a “Star” application

Web Browsing 26%

Streamed & Buffered Audio/Video

22%

Online File Storage 11%

P2P 19%

VoIP/IM/Video Calling

5%

Gaming 4%

Email 2%

IP-VPN 3%

Other 8%

Internet Traffic by Application

Telegeography

2011 2012 2013 2014 2015 2016

Video File Sharing

Business Data Web and Other Data

Video Communications Voice Communications

Online Gaming

109.5

93.8

77.4

59.1

43.5

30.7

Estimated Global IP Traffic per Month

Cisco

Unit(Exabyte)

20

40

60

80

100

120

15

5 24

32 41

49 52 6

9

14 18

23

Traffic Trend in Korea 03

By internet services

35% 33% 31%

31% 32% 31%

10% 11% 14%

10% 11% 12%

14% 13% 12%

2012Y 4Q 2013Y 1Q 2013Y 2Q

Web-hard P2P Multimedia Web E-mail etc.

Video

76%

US Traffic

(Unit : Gbps)

0

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014 2015 2016

40

60

99

143

173

226

274

0

50

100

150

200

250

300

2009 2010 2011 2012 2013 2014 2015 2016

Asia Traffic

(Unit : Gbps)

28

46

60

104

148

194

235

01 KT Traffic Forecast by Country

Inbound Outbound Current Capacity Required Capacity

190G

321G

257G

275G

Analysis by Estimated global IP traffic per month in Telegeografy and kt global traffic expectation graph

Total Traffic

US Inbound EU Inbound ASIA Inbound Current Capacity Required Capacity

0

100

200

300

400

500

600

700

2009 2010 2011 2012 2013 2014 2015 2016

(Unit : Gbps)

01 KT Total Need 628 G bandwidth to cope with global IP traffic by 2016

275G

321G

31G

628G

Forecast

447G

Domestic Traffic Trend 03

KISA 2012

2.8%

9.1%

11.9%

16.8%

20.2%

43.7%

54.8%

56.6%

4.1%

5.2%

65.0%

81.4%

Other

Digital camcoder

Game console

MP3 Player

Notebook

GPS Navigation

Digital Camera

Digitial TV

SmartPad

Smart TV

Smartphone

Destkop

Market share

Smart device 66.5%

Traffic

Fixed(Tbps)

0

0.5

1

1.5

2

2.5

2010 Jan 2010 Jun 2010 Dec 2011 Aug

30

0

20

10

Mobile(Gbps)

NTMS/ARGOS

66.5% of households in Korea have smart devices

1 International internet traffic trend

2 KT Plan to Cope with the Traffic

3 Integrated construct highway and network infrastructure

4 Consideration

01

APG (Asia Pacific Gateway)

- Landing (11): Korea, Japan (2),

China(2), Hong Kong, Singapore,

Malaysia, Taiwan, Vietnam, Thailand

- System Capacity : 38.4Tbps

- Ready For Service : Early 2015

New trans pacific

- Landing (7): Korea, China (3),

Taiwan, Japan, USA

- System Capacity : at least 15Tbps

- Ready For Service

: 2017 (under discussion)

Plan 1 - Submarine Cable Capacity

The existing submarine system will adapted a new technology : 40Gps or 100Gps

Asia Pacific Gateway launching (under construction)

New pacific cable launching (under discussion)

US 340Gbps Asia 290Gbps

‘14 US 400Gbps Asia 340Gbps

‘15 ‘16 US 280Gbps Asia 240Gbps

‘13

02

JAPAN

SINGAPORE

TORONTO

NY

London

HongKong

PHILIPPINE

VIETNAM INDIA

PALO

SEATTLE

LA (1Wilshire / Equinix)

Amsterdam

THAI

KOREA

INDONESIA

FrankFurt

Global POP : 12 Countries 14POPs

Internet POP : 7 Countries 10 POPs

USA(5), Canada, United Kingdom(2), Germany(2), Netherlands, Japan(2),

Hong Kong(4), Singapore(2), Vietnam, Philippine, India, Thailand, Indonesia

Plan 2 - Global POP

West Asia(4), Europe(2) countries (until 2016) +

Plan 3 - IP Network Optimization 03

Without a Blind Spot

- Around 100 nodes all over the nation

- 2 center nodes and 20 main nodes

- 10 Gbps to 100 Gbps

High Bandwidth Interconnections

- Copper based access network: 10%

- Fiber based access network: 90%

Domestic FTTH rate

1

2

4

- 6,600 Gbps

- Plan to upgrade to higher bandwidth

Domestic Backbone Bandwidth 3

Plan 4 - All-IP Based Transformation Fixed & Wireless Convergence Service on ALL-IP Network

05

Fixed & Wireless

Separate Network

Wireless CS network

Wireless Back-Bone network

Fixed Back-Bone network

PSTN & AGW

Wireless IMS

Fixed IMS

Enterprise SSW

POTS

Wireless Additional Service

Show-talk AS

Home SoIP AS

Enterprise SoIP AS

PSTN Intelligent Service

Current (2011)

Transform to 2 Networks: Circuit Switched Network

& IP Multimedia Sub System

Wireless CS network

Integrated Back-Bone Network

PSTN & AGW

Integrated IMS

Integrated DB

POTS

Wireless Additional Service

Home + Enterprise SoIP AS

PSTN Intelligent Service

Evolution (2013)

All-IP

Integrated Network

Wireless CS network

Integrated Back-Bone Network

PSTN & AGW

Integrated IMS

Upgraded Cloud DB

POTS

PSTN, Intelligent Service, Messaging, Web AS

Future (2015)

1 International internet traffic trend

2 kt’s plan for traffic increasing

3 Highway Construction & Telecom Infrastructure

4 Consideration

Case Study – “Dreamline” 01

Dreamline network structure (43,188km)

Metro Network Structure

• Subway and main roads

• 14 MSPPs

Core Network Structure

• Highways

• DWDM 400G

• Speed up to 1.6Tbps

Access Network Structure

• Ring configuration

Dreamline leased telecom networks from Korea Expressway Corp. that constructed highways with telecom infrastructures

01 Case Study – “Dreamline”

Cables are housed in cable ducts 1.5m under the surface

Stability 1

Easy connection to other highway cables

Expandability 2

Cost Savings 3

Easy Access for Maintenance 4

Dreamline Network Features

02 Synergy Effects

Construction Cost Reduction 1

Applications for ITS 5

Maintenance Efficiency 2

Restoration Option 3

Service Price Reduction 4

Synergy Effects - Construct Cost Reduction (per km) 02

Terrestrial fiber cable Submarine cable

Form

Material

$ 13,800 Cable: $ 1,000 Manhole: $ 4,800 Pipe: $ 8,000

$ 1,000 Cable: $ 1,000

$ 45,000 Submarine cable: $ 35,000 Steel pipe: $ 10,000

Construction $ 58,000 $ 5,370 $ 135,000

Standard: 1km cable construction - Landing fiber cable : from kt standard quantity for unit (pipe(4), manhole(4), 36C fiber cable) - Submarine cable : from kt Submarine Company Information

02

Terrestrial fiber cable Submarine cable

Feature

Repair

duration 1 day (using vehicle) 20 days (using Cableship)

Repair cost

(per 1 time) $ 5,000 $ 500,000

Synergy Effects - Maintenance Efficiency

02

Future Current

Synergy Effects - Restoration Option

Taiwan earthquake example - Multiple & Simultaneous submarine cable faults - 8 cables(2006), 4 cables(2007), 8 cables(2009)

Landing Cable is a Restoration Option

02

• Only 8 submarine cables in Asia • Asian population is 60% of the world

Synergy Effects – Service Price Reduction

Why Expensive?

• Can reduce service price by more IP transit competition

Asian Information Super Highway

Atlantic 23 Indian 8 Pacific 18

Asian Information Super Highway

Asia IP transit & backhaul price is 3 times more expensive than that of Europe/North America

Technology: Making the Asian Highway also an Information Highway By Rphan Samarajiva; published on January 6, 2011

02

Automatic Vehicle Charging Service

Traffic Flow Control Service

ETCS Electronic Toll Collection Systems

Illegal parking enforcement services

Vehicle number recognition system

ATE Automatic Traffic Enforcement Service

Real time Signal Control Service

Traffic Flow Control Service

ATC Advanced Vehicle and Highway Service

ITS (Intelligent Transport System), leveraged on integrated highway and network infrastructure

Synergy Effects - Applications for ITS

Information Processing & Monitoring

Information Provision

Information Collection

ATMS Advanced Traffic Management Service

03 Applications for ITS - ETCS Electronic Toll Collection Systems

Number of Passed Vehicles per day(/Lane)

108,000 → 432,000

Processing time per Vehicle

45sec → 9sec

03 Application – ATE Automatic Traffic Enforcement

Number of Casuality

by Traffic Accidents (for 6 months)

87 → 52

Number of Traffic Accidents (for 6 months)

1,405 → 999

Applications for ITS - ATC 03

Advanced Traffic Signal Control Systems

Travel speed Travel hours per travel distance

1 International internet traffic trend

2 kt’s plan for traffic increasing

3 Integrated construct highway and network infrastructure

4 Considerations

01 Consideration - North America Traffic The highest traffic in Asia is to North America

North America Aisa Europe

Consideration – North America Traffic 01

North America Traffic

China

Japan

Korea

ISP

ISP ISP

Mongolia

Europe Traffic

ISP ISP

Pakistan

ISP

ISP India

ISP ISP

Thailand

ISP ISP Vietnam Cambodia

Laos ISP

ISP ISP

Asian Information Super Highway

Need to Construct a new Backbone Network connecting North America

Consideration – Traffic usage efficiency 02

`

After Optimization

Backbone efficiency rate Capacity : 4 X Unprotected 10G Usage : 20G •Unprotected topology • Routing protected scheme

Busan &

Geoje

Seoul ITMC

W (50%)

Guro

Hehwa

Busan ITMC

W (50%)

W (50%)

W (50%)

KORNET

Before Optimization

Backbone efficiency rate Capacity : 2 X Protected 10G Usage : 15G • Ring topology • transmission protected scheme W+P (75%)

Busan &

Geoje

Seoul ITMC

Guro

Hehwa

Busan ITMC

W+P (75%)

KORNET

Ring Topology to Unprotected Network (reduce USD 650,000 and capacity efficiency increase 12.5%)

Packet Transport

Circuit Transport

Optical Technology

Previous 1980s 1990s

Voice

PDH SDH

10/100BaseT GbE

Pure IP

Pure Ethernet

10GbE 40/100GbE

MPLS

2000s Afterward

Metro Ethernet

MSPP

MSTP

Next MSPP

& Hybrid

Router

Switch

Metro DWDM

DWDM

CWDM

• PTN : Packet Transport Network • ROADM : Reconfigurable Optical Add-drop Multiplexer

Consideration - Cost Efficiency 02

ROADM

PTN

The Latest Transmission Technology – PTN, ROADM