When we talk about 5G, there is one phrase that everyone agrees and likes to say – 5G will not only enhance speeds, but also have every thing ‘connected’ and every industry ‘converged’. What underlies all of this 'keeping every thing connected' is IoT while what keeps industries converged is artificial intelligence (AI) that analyzes big data and derives intelligence and insights from the data. This is why IoT and AI have become key topics when network operators talk about future business.  
 
On 11th of January, SK Telecom shared a plan to invest $4.2 billion over the three years to come to build/foster an ecosystem in the new ICT industry, putting main focus on AI, autonomous driving and IoT. The following week, KT announced company-wide reorganization and disclosed a plan to strengthen its technological capabilities in AI by launching AI Tech center dedicated to developing AI strategies and promoting R&D activities.
 
There have already been many voice recognition-based AI devices globally. Competition is especially fierce in AI speaker sector. Amazon launched Echo featuring Alexa in 2014, followed by Google who presented Google Home in May 2016. Apple is on target to introduce one featuring Siri and MS also is set to release an AI speaker with Cortana built-in in February.
 
Locally, SK Telecom first opened a new AI service era with NUGU, an AI-enhanced speaker in September 2016. Then in January 2017, KT joined the race, introducing GiGA Genie, a voice/video-recognition-based AI TV. LG U+ will be also launching one in the second half of this year. In addition, Samsung Electronics who acquired VIV Labs and Harman last year, LG Electronics and Naver are also getting ready to enter the race, making the competition in the market even fiercer.  
 
<AI Services: NUGU by SK Telecom vs. GiGA Genie by KT>
 
 

■ Why TV? 
While most players in the AI market are focusing on speakers, KT chose TV. Then why?
 
Korea has the fastest average Internet speeds and highest broadband Internet adoption rate in the world (see the relevant article). And KT, a long-time No. 1 wireline network provider in the nation, has remained unbeatable in broadband and IPTV sectors. Cable TV has had the highest subscriptions in the paid-in TV market of the nation. But, as more and more Internet users are subscribing to IPTV services offered by the local telcos, the number of IPTV subscriptions is expected to exceed that of cable TV subscriptions soon.
 
As of Q3 2016, KT has a market share of 42% (8.48 million) in the local Internet market, and 24% of its Internet subscribers (2 million*) are subscribing to GiGA Internet service which has a higher ARPU. And as a result, the company’s revenue in the Internet sector finally rebounded after a year and a half-long decline (* 2.5 million as of January 16, 2017).  In the local IPTV market, the company has 52% market share (6.9 million), and 82% of its Internet service subscribers are IPTV subscribers. KT's IPTV, with the rapidly increasing revenue, will soon outnumber the revenue of Internet service.
 
 
KT’s market shares and revenues in BB (Internet) and IPTV markets (source: Netmanias - 1, 2, 3)
 
Apparently, IPTV is driving KT’s revenue growth in the wireline sector, which is why the company sees it as foundation for the new growth engine business of the company.

• IoT: A variety of Healthtainment (Health + Entertainment) services like Health band, Health bike, Golf putting, etc., will be offered through IPTV
• VR: VR service, one of the most innovative services that 5G is about to present, is offered through IPTV over the wireline network. In November 2016, an IPTV VR service called 'olleh tv 360° GiGA VR' was launched.
• AI: GiGA Genie, an AI TV, was launched.

What's special about this IPTV-based GiGA Genie is that it not only recognizes voice as other AI services do, but also recognizes video. The AI market so far has been dominated by speakers that typically feature voice recognition technology and AI platform. However, KT's AI service is different in that it uses GiGA Genie, an AI-enhanced, IPTV set-top box that features voice/video recognition and AI platform, plus built-in speaker, camera and IPTV compatibility to serve users.
 
Once connected to the TV, GiGA Genie displays service menus and information on the TV monitor so that users can actually see and make selections from all the highly-visualized, interactive services displayed.

 
■ GiGA Genie: Features and Underlying Technologies
At the press conference, Gyu-tae Baek, head of the service research center at KT, gave a presentation about GiGA Genie's features and the technologies that underlies it through demonstrations.
 
GiGA Genie's features
The voice/video-recognizable AI TV has the following three features:

• Visual Interface (Information display): e.g. displaying routes to destinations on the map or GPS for easier perception
• Visual expression: e.g. animation characters and emoticons (emojis) can be used during video calls to add tone 
• Visual interaction: e.g. Hyper VR, sharing data, etc.

Three technologies that underlie GiGA Genie
 
1) Home service
KT's first AI service was introduced as home services like IPTV, music and home IoT services. The company, No. 1 player in IPTV market and No. 2 in music streaming market, is now attempting to expand to home IoT market with its flagship healthtainment services.
 
 
 World’s first Web-based Smart STB  (2013.7)
 World’s first UHD IPTV  (2014.9)
 Wireless IPTV 'olleh TV Air'  (2016.7)
 World’s first IPTV 360VR launched  (2016.11)
          
2) AI Technologies
The three underlying AI technologies of GiGA Genie are:

• Voice recognition
• Video recognition
• Big data technology

The slides in the pictures below show three technologies that KT has accumulated through various services it has offered: voice recognition, video recognition and big data technologies. In the voice recognition technology, there has been performance enhancement made thanks to the 'deep learning' technology that was adopted recently.
 
 
Voice Recognition/Dialog Technology
GiGA Genie 

Deep learning platform
 Speech recognition search (IPTV('13), olleh TV mobile ('15))  ⇒ Speaker recognition, Distance speech recognition 
 Natural language recognition processing (GiGA Genie ('17), Speech To Text (STT) deployed in customer contact center)  ⇒ Dialog/Analysis technology, Natural language processing technology
 IPTV reasoning/curation (TV semantic search ('10), Emotional intelligence curation ('15))  ⇒ Reasoning technology, Semantic technology
 
 
Video Recognition Technology 
GiGA Genie
 Face recognition security service (2016)   Intelligent video security service (2016)  
 Multi-video search service (2004)   Illegal IPTV content prevention service (2009)   Global patent profit business from HEVC (2016) 
 
 
Big Data Technology
GiGA Genie
 Personalized curation, Intelligent IoT, Context-aware recommendation, Commerce curation, Data mining 
 IPTV   Music   IoT   Informative data (Weather, Traffic)   Customer center call (114)   Shodoc   Clip   T-Commerce   KT-MEG 
 
3) AI Platform
GiGA Genie, running on the AI platform powered by all these AI technologies, closely interworks with various home service platforms by KT (e.g. IPTV, music, communication (voice/video call), home IoT), and will be working with other platforms by 3rd parties as well in the future. The company plans to make the AI platform open to public through the AI Alliance, and build an AI ecosystem through partnership with 5G Alliance and IoT Alliance as well as the AI Alliance.   
 
Initially, GiGA Genie is intended to serve at home, but will soon be adopted and converged in various industries like energy, financial, medical, automobiles, and so on.   
 
 
 Service/Technology-converged, Video-based Home Assistant Platform 
KT Service Platform: OTV (olleh TV Live), Music, Communication, Home IoT
3rd Party Platform: Everyday information, Common knowledge, Expertise 
 
■ Q&A
In the Q&A session, many questions about GiGA Genie were asked although not all questions were answered in detail. Below are the highlights of the session.
 
 
Gyu-tae Baek (head of the Service Research Center), Dongmyun Lee (head of the Institute of Convergence), Heon-mun Lim (president of the Mass General Business Division), Kuk-hyun Kang (head of the Marketing Division) during the Q&A session (from left)
 
Q) SK Telecom announced partnership with IBM for integration of IBM’s AI Watson into its NUGU. Do you have a plan to seek a partnership opportunity?
A) For AI technology, we are working on our own for now, but will have to reach out to 3rd parties when we believe our knowledge base has to be reinforced.
 
Q) GiGA Genie will be shared with others like other members of the family. How about security? 
A) It has a platform that comes with some personalization options. Speaker recognition technology is now being reviewed and will be introduced soon. For now, it requires a passcode for access.
 
Q) Tell us about KT’s voice recognition technologies. What are their recognition rates ?
A) Our voice recognition had been algorithm-based until deep learning-based recognition was introduced recently, leading to enhancement in the recognition rates. The accuracy rates of natural language processing are 89~90%, and the recognition rates in KT IPTV service were 95~96% as we measured. 
 
Q) SK Telecom has sold over 4 million NUGUs so far. What’s your goal?
A) No goal has been set. Annually, we sell over 1.2 million STB, which means over 1.2 million new subscription to IPTV. As our new IPTV subscribers will be using GiGA Genie, we expect to have a good number of new subscribers.
 
Q) Is GIGA Genie supposed to remain connected with TV all the time? Does it work as a speaker?
A) GiGA Genie can serve as a speaker on its own, and it is actually sold as a speaker too. However, synergy effect can be achieved when used with a TV. It can be introduced in a diverse range of industries, like energy and automotive.
 
Q) What is power consumption of GiGA Genie?      
A) Its power consumption rates are 9W when operating, 7.82W in stand-by mode and 0.38W in low power consumption mode (monthly cost is about KRW1,000). Because it also serves purposes other than a STB, the power consumption is 1~2W higher than conventional STBs.
 
Q) What to expect in the market? What’s KT’s strategies and plans for the market?
A) Obviously, the market will face another challenge this year. With our 2.5 million GiGA Internet subscribers (as of January 16), we will have our leadership strengthened in the IPTV market. Last year we saw significant growth in the enterprise LTE division. This year, with the LTE dedicated to enterprise and NB-IoT to be released in the first half of the year, we expect further growth in the mobile market. We are aiming to offer differentiated services through close partnership with 5G Alliance and AI Alliance.
 
Q) Yesterday, there was reorganization in the company and an AI tech center was launched. What is the purpose of the center? How it will be run?
A) AI Tech Center is aimed to 1) enhance AI technologies, and 2) support many business divisions of KT to learn, apply, develop and deliver AI solutions as AI continues to expand within and across industries.
 
Q) What makes it the world’s first AI TV?
(AI devices from Baidu and SK Telecom can interwork with TV too.)
A) Their devices can also interwork with a TV, but nothing more than interworking itself. On the other hand, KT’s GiGA Genie can not only interwork with a TV itself, but also can make the TV and even services available from the TV interwork with other devices and other services, respectively. All platforms involved can interwork with each other. Soon, AI devices will be offering a even wider range of services. Considering the scalability to be required, only TV can serve the purpose. AI devices from others will not be able to outperform GiGA Genie which offers special features like visual expression or visual interaction. 
 
Q) Why TV?
(TV is not as scalable as mobile phones. But then why did you choose TV as the first platform for AI service?) 
A) TV is still the center of our life at home for most of us, and KT has a pretty strong and firm business model in the IPTV market. Because we have a good subscriber base in IPTV, we wanted to take advantage of it when introducing AI. 
 
 
 
GiGA Internet and IPTV have been driving KT's revenue growth in the wireline sector, but the growth rate slowed down in the already highly penetrated market. KT, desperate to seek a new growth engine to boost ARPU, came up with GiGA Genie, which can be bundled with services that give high ARPU (i.e. high margin) like GiGA Internet and UHD TV to drive revenue growth.   
 
GiGA Genie offers:
      - GiGA Internet + olleh GiGA UHD tv + GiGA Genie (for new tv customers)
      - olleh GiGA UHD tv + GiGA Genie (for new tv customers)
      - GiGA Genie (for existing tv customers)
 
SK Telecom, who entered the AI market with NUGU for the first time in the nation, has sold a well over 40,000 units since September last year. KT strongly believes that it would not have difficulties in selling GiGA Genie as it has over 1.2 million new IPTV subscribers every year. LG U+ also has a plan to launch an AI service this year, opening up an AI era and making the competition even more intense.
 
For now, both NUGU and GiGA Genie only support Korean language. In order for them to go global, supporting other languages is essential, and that's why potential partnership between SK Telecom (NUGU) and IBM (Watson) is being discussed. As the possibility of partnership between Korean telcos and global platform manufacturers emerges, keen attention is being drawn to details of the potential partnership such as whether the telcos will ever want to adopt an AI platform from a global manufacturer or not, how and to what extent the partnership will be made, whether the telcos will still want to have their own AI platforms or not.