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PRESS RELEASE

KT and Cisco Announce Global Strategic Collaboration to Bridge IT and Communications Markets

SEOUL, South Korea – November 7, 2011 – KT Corp., Korea's leading telecommunications service provider, and Cisco announced today a global strategic collaboration to bridge the IT and communications markets. The collaboration, which combines KT's communications infrastructure and expertise with Cisco® networking and communications innovations, is based on an extensive relationship which spans across Smart+Connected Communities, business to business (B2B) services, and cloud computing.

The first initiative of this strategic collaboration is a minority investment from Cisco in kc smart service Co. (kcss), a KT subsidiary, which will offer managed services for smart buildings and smart city projects. kcsmart service is expected to be fully operational by January 2012. The companies have executed agreements that establish the framework for their collaboration, enabling kcsmart service to have the ability to incorporate the technologies and tools of KT and Cisco.

KT chairman and CEO President Suk-Chae Lee said: "This isn't a one-off release or consulting partnership, but a way of developing a long-term cooperative business model, which is by far the more meaningful. Through this project, KT's core aim is not just the commercialization of smart space solutions, but the accumulation of business experience and the fostering of talented human resources and many other goals in other business fields also that can be accomplished through the strengthening of our global competencies."

Cisco chairman and CEO John Chambers said via Cisco TelePresence®: "Cisco and KT have a long history of collaboration, and we share a common belief that the network is the foundation for the development of smart buildings and smart cities. We look forward to expanding our collaboration with KT as new business models evolve, such as cloud services."

The collaboration with KT is also aligned closely to several of Cisco's five priorities, including core networks and services, architectures and cloud computing.

Highlights:

  • kcsswill be funded with starting capital of US$30 million from KT and Cisco, with Cisco holding a minority stake. KT will contribute intellectual property, human resources, and other non-monetary assets in the company. The initial overall valuation of kcss is over US$60 million. The company will initially be formed with 30 staff members including experts in smart space (smart building/city)solutions, with the potential to increase to 70 by 2012.
  • KT will be in charge of the overall operations management ofkcss, which will be headquartered in Korea. kcsswill initially target 14 countries in the Asia-Pacific region, including Japan, China and Southeast Asia, with a focus on smart cities, buildings and tenant services.
  • kcss will utilize KT's developed smart-space combined platform Ubi-Cahn (Ubiquitous City Administration Hub with Network)and Cisco's Unified Service Delivery Platform, which together offer a comprehensive blueprint for smart buildings and smart cities.
  • Through its application of Ubiquitous Sensor Networks, Broadband Convergence Networks, and Machine-to-Machine technology, kcsswill design new spaces that address all aspects of city life from parks to buildings.
  • kcsswill initially offer three types of services. The first service, named Smart City, has the goal of designing and managing new spaces that cover many aspects of city life. These include traffic control systems, transportation, electricity, water and other utilities management, fire services, and facilities management.
  • The second service, Smart Building, focuses on the construction of wireless network infrastructure for the internal and external aspects of a building, incorporating the implementation of the Building Intelligence System (BIS) and Building Automation System (BAS).
  • Smart Tenant, the third service, provides solutions customized to the needs of landlords and tenants, including key services such as energy management, digital signage, public safety systems, and car park management.
  • Two other areas that KT and Cisco are exploring collaborating in are business-to-business services and cloud computing. KT has already started putting in place the essential building blocks through a robust communications infrastructure for a solutions ecosystem that will help enable small and medium-sized businesses to expand their businesses beyond their home countries.
  • In cloud computing, KT similarly has plans to establish a cloud-development business by the end of the year and establish an R&D center in Silicon Valley, California, early next year.

About KT

KT is a prominent South Korean integrated wired/wireless telecommunication service provider, holding 86% of fixed, 32% of wireless, 45% of broadband market share respectively of the nation (19.3m, 16.3m, and 7,6m of subscribers). There are now 33 subsidiaries owned by KT, including finance banking business, contents business, satellite broadcasting, submarine cable company, etc. With introduction of iPhone in 2009, KT has changed paradigm of Korean market to the smart place and is leading local fixed and mobile communications area as a basis for real smart world. Additional information about KT can be found by visiting www.KT.com .

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.

Cisco products are supplied in Korea by Cisco Systems International BV, a wholly owned subsidiary of Cisco Systems, Inc.

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Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. A listing of Cisco's trademarks can be found at www.cisco.com/go/trademarks. Third-party trademarks mentioned are the property of their respective owners.The use of the word partner does not imply a partnership relationship between Cisco and any other company.

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