On the 20th of March, SK Telecom and China Unicom, a CDMA mobile phone operator in Beijing that has 8.25 million CDMA subscribers, as of December 2002, and is expected to secure 20 million subscribers by the end of 2003, signed a formal contract to establish a Joint Venture company that will take charge of the wireless Internet business in China. This J/V company was capitalized at 6 million US dollars. SK Telecom owns 49% of the J/V company’s equity share while China Unicom has a 51% equity share.

After reaching this formal agreement, the two companies will take the necessary steps to obtain a business license and build the wireless Internet platform through forming and operating a JV Company Business Arrangement Committee. In accordance with legal procedures in establishing a J/V company in China, the business license will be active after June of this year. Accordingly, the J/V company will be able to launch wireless Internet services by the 3rd quarter of 2003.

Through the J/V company, SK Telecom will have an opportunity to launch the following businesses: ? An internet portal site operation related business to do it’s own portal site construction, own brand launch, subscriber management, content sourcing etc. ? Sales of value-added communication service-related hardware, software, and information content ? wireless Internet-related research and development services.

The J/V company’s Board of Directors consists of 5 members. They are, Shangbing, vice-chairman of China Unicom, Maochienchuan, Chief Technology Officer of Shansi Province, Chaiibing, Chief Officer of the Value-added Communication Business Division, Bang Hyung Lee, head of SK Telecom’s Internet Business Managerial Group, and John Liu, president of SK Telecom China.

The name of the J/V company will be decided by the JV Company Business Arrangement Committee that will be organized right after signing a formal agreement. Both companies agreed to the principle that the high-ranking officials from SK Telecom would take the position of CEO and CTO (Chief Technology Officer) of the J/V company, and executives of China Unicom will be appointed as Chief Financial Officer and Chief Operating Officer.

In particular, the favorable distribution of wireless Internet service information use fees compared to other companies is clearly stated in the contract. In this regard, Korea’s other leading wireless Internet companies that plan to advance into overseas markets, will go into the Chinese market in the form of J/V companies with improved conditions. This will greatly contribute to the growth and increase in revenue, of the wireless Internet market.

SK Telecom and China Unicom have been implementing the establishment of a J/V company since last year. On July 3rd, 2002 the two companies signed the MOU and reached an overall agreement for the establishment of the J/V company on January 16th, 2003. In addition to the formal contract regarding the J/V company, SK Telecom will provide the consulting service necessary for the launch of wireless Internet service. The company plans to sign an additional contract that provides for consulting services for the construction and operation of the wireless Internet platform. Specific terms and conditions of the consulting service will be decided by the JV Company Business Arrangement Committee.

As SK Telecom advances into the Chinese market with more than 200 million cellular subscribers, the company will strive to assume the leading position in the world’s wireless Internet market by forming similar cooperative systems throughout Northeast Asia. This cooperative joint venture is a giant step toward that end.