2. 2

3. 3

4. in Korea with 120-year history!
Wireless arm of KT, the dominant telecommunication company
in Korea with 120-year history!
- Subscribers: 13.8M (2008.2), 3G/WCDMA Subscribers: 4M (2008.2)
- Revenue: US$ 7.3B
One of the leading mobile companies and No.1 3G company in Korea
- World 1st to introduce m-commerce (K-merce)
Innovative convergence and infotainment service provider
- Leader of Pay-Buy-Mobile Project participated by 44 operators
Board Member of GSM Association (CEOs of 23 Operators Members)
Member of
The GSM Association (GSMA) is a global trade association representing more than 700 GSM mobile phone operators across 217 territories and countries of the world. In addition, more than 180 manufacturers and suppliers support the Association's initiatives as associate members. 4

5. a part of Pay-Buy-Mobile project
NFC-based Mobile Payment with credit card embedded in SIM Card
Demonstration in Nov. 13th at Mobile Asia Congress in Macau as
a part of Pay-Buy-Mobile project
Contactless M-Payment roaming made in five countries
(Korea, USA, Malaysia, Taiwan, U.K.) 5

6. 6

7. Mobile Banking (1999.11) Network for e-Money Firm Banking
PC Banking
(1987,1990~)
CD / ATM Network
( )
Tele Banking
(1992.1)
Inter-Bank Network
( )
Firm Banking
Banking Network
( rural coverage)
(1996.5,97)
Common Network
for e-Finance
(2000.7)
Network for e-Money
Internet Banking
(1999.7)
Mobile Banking
( )
’87
’88
‘92
’96~97
‘99
’00.07
'01.04
‘89
E-Finance Chronology in Korea
 Source : Current e Finance Development & Main Issues
( Korea Finance Research Center 2006) 7

8. Low income family Foreign workers
Post Office
Bank
- Social security & welfare
- Funding for government
driven community development
- Rural and remote area
54.55%
45.45%
94.94%
6.6%
 Source : “Post Office Finance Vision and Business Plan”,
MIC Division of Financial Business ( )
Rural Areas
Urban

9. Banking Anywhere 9

10. 10 10

11. Int’l P2P transfer provider market
(2003)
Other
55%
Western
Union
25%
Eurogiro
11%
MoneyGram 6%
Vigo 3%
A matter of cost
Money transfer facilitated by few players
Customers pay 10-15% of amount sent,
Need for physical presence keeps prices high
Debit card vs. Mobile penetration
1.4
Mobile Penetration
Debit Card Penetration
1.2 1
0.8
% Penetration
0.6
0.4
0.2
India
China
Mexico
France
Brazil
Egypt
Indonesia
Pakistan
Morocco
Portugal
Russia
Turkey
Nigeria
Serbia
Jordan
Columbia
Sri Lanka
Malaysia
Ukraine
Philippines
Bangladesh
El Salvador
Nicaragua
Dominican Rep.
A matter of access
 Banks: 0.5M branches, 1M ATMs,
1.4M deposits worldwide
 MNOs: 3 bn customers worldwide
 Sources: World Bank, BCG, CGAP, Market Intelligence 11

12. Money transfer fee comparison (’05.06)
1.5
Cost by channel
0.5 1
Cost per Transaction
Money transfer fee comparison (’05.06)
( Bank fee for transfer of $100) 3 1 2
Average Fee
Internet Banking
PC Banking
ATM
Phone Banking
Full Service Branch
Full Service Branch
CD/ ATM
Internet Banking
Phone Banking
 Source : Goldfinger, Charles(96.8)
 Source : Current e Finance Development & Main Issues
( Korea Finance Research Center 2006) 12

13. Mobile Commerce Transaction Market M-banking Implications20 40 80 60
North American
Europe
Asia Pacific
Rest of the world
M-banking Implications
2009
2008
2007
2006
2005
2004
9.7
27.13
34.6
3.0
7.2
22.99
28.4
2.0
5.5
18.69
21.7
1.7
4.3
15.07
16.4
1.4
3.2
11.78
12.1
1.1
9.2
2.5
9.0
0.8
 Sources: Frost & Sullivan 13

14. Financial service for reaching the unbanked Mobile Network Operators
Banks
Greater
Reach
Banking
Service
Mobile Banking
Mobile Money Transfer
Mobile Bank Branch
 Providing network coverage and access to large
base of customers
 Mobile handset to deliver secure and convenient
banking services
 Agent shops for extending bank branch functions
 Embrace mobile network as a mean to extend
banking service - reaching the un-banked
 Use mobile phone number as bank accounts
 Development of platform to extend secure
services over mobile handset
Banks
Mobile Network Operators

15. International remittance, bill payment, loan, credit cards, etc.
Simple Text
Graphic Multimedia
Secure Elements
Contact-less
Interactions
Application
Downloading
SMS
Browser
IC Chip / USIM
NFC
Basic banking functions: Balance check, bank transfers, debit cards
Extended banking functions :
International remittance, bill payment, loan, credit cards, etc.
Users get accounts from banks:
Deposit and cash withdrawal at bank branches, CD/ATMs, Phone bill 15

16. (IC chip / USIM embedded )
WAP G/W
Tele -
Communication
Systems
Online Transaction
Offline
Transaction
CD/ATM
Dongle RF
Internet Banking
Server
Host Server
Mobile
Servers
Operators
Bank Systems
Bank
Channels
Handset
(IC chip / USIM embedded ) 16

17. Click “Bank Service”
from menu
Balance check
Money transfer
Transfer completed
Use of CD/ATM service
Input PIN

18. 18

19. 19

20. 20 20

21. Mobile Banking Usage Growth
Usage Rate by Channel
( unit : %)
 Source : Bank of Korea , KTF Analysis
02.6
03.3
04.3
05.3
06.3 12
Mobile Banking Usage Growth
( unit : 1,000)
 Source: Bank of Korea
1) usage rate includes account check and bank transfer
2) account check takes up to 80% of the usage 7 21 23 32
Internet Banking
Tele
Banking
Bank
Channel
CD/ATM
Mobile Banking 18
2005
2006
140
446
218.5% 21

22. Usage Rate (Average Daily)
3,406,000 Subscribers ( ), 571,000 Average Daily Usage
USD 929M transaction amounts
(1000)
500
1,000
1,500
2,000
2,500
3,000
3,500
2003
2004
2005
2006
2007
(1/4Q)
No of Subscribers
Usage Rate (Average Daily)
(1000)
100
200
300
400
500
600
(USD M)
800
1000
usage
ARPU
189
894
1,861
2,979
3,406
272
567
735
929
2004
2005
2006
2007 (1/4Q)
140
287
446
571
 Source: Center for Finance & Payment 22

23. Customer Value Creation New Revenue Generation
Intention to use K-bank
 Source: Korean MNO s collaborated market research, N=660
Customer Value Creation
Before using K-bank
Intention to use
After using K-bank
Intention for continuous usage
Intention to recommend to others
95.7%
76.5%
37%
Estimated K-merce finance revenue (2009)
 Source: BCG, KTF Analysis
New Revenue Generation
Revenue from customer retention
50%
Mobile finance revenue
~20%
Value added service revenue
~20-25%
Total sum
USD200 M

24. Physically Isolated Regions
Mobile Banking 8%
Young Generation
Micro Payments
37%
Company to employees
Gift Certificates
30%
Low Income
Welfare
Price Plan 7%

25. inter-operability across all banks inter-operability across all banks
Importance of building trust between Bank and Operator
Importance of building trust between Bank and Operator
Development of “win-win” business model
Lowering entry barriers
Communication tariff, banking service fees, transaction fees
Making service easy, safe and accessible
Simple user interface, hacking-free security control
Development of common service platform to promote
inter-operability across all banks
Hardware and software
Development of “win-win” business model
Lowering entry barriers
Communication tariff, banking service fees, transaction fees
Making service easy, safe and accessible
Simple user interface, hacking-free security control
Development of common service platform to promote
inter-operability across all banks
Hardware and software
Regulatory assistance for “Universal Mobile Banking”
- Extension of ‘Universal Telecomm service” concept to “Universal mobile banking service”
- Amendment of related regulations to allow MNOs to provide banking service in collaboration
with banks
- Security guidance: “Electronic Financial Transaction Act”

26. 26