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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

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

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Mobile Banking (1999.11) Network for e-Money Firm Banking PC Banking (1987,1990~) CD / ATM Network (1988.8 ) Tele Banking (1992.1) Inter-Bank Network (1989.12) 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 (1999.11) ’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

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 ( 2007.7) Rural Areas Urban

Banking Anywhere 9

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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

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

Mobile Commerce Transaction Market M-banking Implications 20 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

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

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

(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

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

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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

Usage Rate (Average Daily) 3,406,000 Subscribers (2007.03), 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

Customer Value Creation New Revenue Generation Intention to use K-bank  Source: Korean MNO s collaborated market research, 2004.4 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

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

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”

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