Samsung Networks / VoIP Samsung Internet phones to lead next-generation communication market Samsung Networks will place the first priority of its managerial strategy on offering differentiated quality and service to customers in order to keep its No. 1 position in the market persistently, a senior manager of the company said. In an interview with the Korea IT Times, Chun Hong-kyun, executive director of Samsung Networks, a subsidiary of the nation's biggest Samsung Group, said, "In 2006, the Internet phone market will really be taking off. As common carriers such as KT and Hanaro and special category telecommunications service providers such as SK Telink will stage marketing activities in earnest this year, the competition in the market is likely to be fiercer than ever. "To maintain the top position in the market under this circumstance, Samsung Networks will provide customers with high-quality and differentiated products and services this year," said Chun. Related to this, Samsung Networks will strengthen such telephone-type services as call connection voice, Internet fax assistance, and voice mail box, while bolstering such information-type services as interworking of groupware and business system as well as voice-recognition dialing. At the same time, it plans to introduce telephone terminal equipped with the short message service (SMS) function and multimedia function additionally. "Along with this, we are planning to diversify fares of products in order to help customers wide the range of their choices. We will also expand the number of agents in the country to provide more conveniences to customers," he said. As part of its efforts to push for tailormade customer services, Samsung Networks plans to establish an Internet telephone operation team and build a systemized customer assistance system. In particular, it projects to offer potential customers more chances to test Internet phone by staging vigorous marketing activities in specific regions centering on relevant agents. "Through these sales promotion activities, Samsung Networks aims at achieving 40.3 billion won (about $41.5 million) in turnover and 500,000 in the number of subscribers in the Internet phone market this year," he said. Asked about differences and characteristics of Samsung 070 Internet telephony service, Chun said that its first pride is outstanding call quality. The Samsung 070 service is equipped with stable and excellent voice quality without noise or delay of delivery, widely different from the "Internet phone" of the past, he said. Samsung 070 Internet telephony service adopts voice compression corder/decorder of the level of general telephone and operates a real-time monitoring system for 24 hours a day in 24 regions in the country to keep high quality. In fact, the Samsung 070 service gained 90 in the voice quality test conducted by Telecommunications Technology Association (TTA), higher than the recommendation measurement price of 70. The signal-reaching hour between telephones was also less than 120ms for the Samsung 070 service, outpacing the standard of less than 150ms. It also recorded 99.9% in the call success rate, showing a high call quality. Second merit is low fare. In case of using the Samsung 070 Internet telephony service, a user can save call charge by the maximum 84% for long-distance call, 70% of international call, and 18% for mobile phones, compared with general call fares of the existing telephones. As calls among main office, branch, factory, and business center are offered free of charge, users can utilize it freely within the company, he explained. Along with this, users can receive such additional services as caller identification, hold while using another call, and conversion of receipt of message, free of charge. Third characteristic is a variety of additional functions. The Samsung 070 Internet telephony service is equipped with some 200 various and convenient additional services by using Internet line (LAN line) and PC interlocking function. "In particular, I think that such functions of the Samsung 070 service as clickto- dial, simultaneous receipt of calls and outside office calls contribute to improving business of enterprises," said Chun. Among representative additional services of the Samsung 070 services are click to dial; receiving call transfer/simultaneous receipt of calls; conversion of receipt of message; inquiry of details of conversation by telephone; hold while using another call; connection of designated number; multi-number and ringing; and outside office calls. The Samsung 070 service armed with outstanding call quality and various additional functions greatly contributes to enhancing managerial efficiency of enterprises using the service, he said. The Samsung service helps consumers and enterprises reduce their burden on communication expenses by expanding the range of their communication choice rights. Meanwhile, information and communication companies will gain benefits stemming from improvement of their profit structure and infrastructure by using the Samsung 070 service. At the same time, the profit structure of communication providers is expected to convert from the voice-oriented one in the past to network, contents and other information- centered one gradually, said Chun.

The following are excerpts from an interview with Chun Hong-kyun, executive director of Samsung Networks: Q: What is the meaning of the commercialization of the Internet phone, the first in the country A: I think the existing wire telephones have finished their duties demanded by the era. With the rapid development of technology and advent of the ubiquitous era, an existence above telephone that can deliver more information than existing telephones was needed. The right answer to the necessity is Internet phone. Samsung Networks, which introduced the VoIP (Voice over Internet Protocol) service in 2001 for the first time in Korea, has accumulated technology and know-how. At the same time, it has secured the 52.5Gbps optical communication network connecting 64 cities in the nation into one and high-quality global network infrastructure linking about 400 sites in 70 countries. I think such excellent ability and infrastructure is the strength to let Samsung Networks, the leader in the next-generation communication market, keep its No. 1 position in the Internet telephone market. Q: What do you think about the situation of the Internet telephone service market A: The Internet telephone market has been grown at a rapid pace. In the United States, the number of subscribers to Internet phone already exceeded 2.5 million in 2002 and is expected to surpass 7 million before 2007. In Japan, the number of subscribers to Internet phone reached 5 million in June 2003 among 14 million people using Internet. Reflective of such a fever, many world-famous IT enterprises, including eBAY, MS and Google, took over Internet phone-related companies recently. Meanwhile, the British biggest communication company BT advanced into the Internet phone market directly. The volume of the Internet phone market is expected to soar from $2.38 billion in 2005 to $4.1 billion in 2007. In the domestic Internet phone market, Samsung Networks commercialized the Internet phone on Aug. 22 in 2005 for the first time in Korea. And since then, a total of 12 companies, including KT, Hanaro Telecom and SK Telink, are staging stiff competition. The total sales in the market are likely to expand from 197.8 billion won ($204.1 million) in 2005 to 370 billion won in 2006, 808.3 billion own in 2008, and further to 900 billion won ($928.8 million) in 2009. Meanwhile, ETRI anticipates that the service sales in the Internet phone market will reach 5.3 trillion won ($5.5 billion) by 2010 and jobs for 13,000 people will be created in the market. Q: Would you introduce Samsung Networks A: Since having started its supplement communication business in 1987, Samsung Networks has been continuously making fast progress and development as a frontier of global information communication enterprises. It connects more than 70 countries in the world based on its four domestic information network centers and five overseas IT centers in the United States, Japan, Britain, and China.