LEARNINGs from South Korea on 5G Deployment

South Korea surpassed the 3 million 5G subscriber mark on 9 September, with coverage expected to reach 93 per cent of the population by the end of the year. Operators continue to expand coverage across the country, targeting service in all major cities and the surrounding areas. They also are focused on improving indoor coverage. Just five months after simultaneously launching 5G service in early April, the country’s mobile operators have more than 90,000 5G base stations, nearly double the number installed at launch. Users have a choice of two 5G smartphone models from Samsung and one from LG.

5G is being made available through the following carriers: SK Telecom Corp, which presently occupies 40% share in the 5G market. LG Uplus Corp, another carrier has about 30% of shares and KT Corp holds the rest of 30%.

There is a saying, Build it and they will come, that’s what the Koreans are doing with 5G. They are not like the some other operators, very careful in rolling things out and saving on the capital expenditure. They are really building, as quickly as they can and using a lot of money on it. We can see it pays off.

SK Telecom also announced that their network was secured through the application of quantum cryptography technologies to minimize the risks associated with eavesdropping or hacking. This announcement comes amidst raising concerns among the public regarding data security in a 5G network. KT (surpassed 1 million 5G subscribers on 21 September), is all set to expand into 85 significant cities across the nation. Their system will be covering the critical transportation routes and in turn to university hospitals, public offices and subways. Some SK Telecom customers will be able to try out xCloud game streaming next month, over both LTE and 5G networks. Microsoft is currently focusing on trialing phone-based versions of xCloud in October 2019.

While subscriptions started modestly at just below 6,000Tb when services launched in April, the latest figures from South Korea’s Ministry of Science and ICT suggest a five-fold increase to just over 30,000Tb in June. The uptake during that month also triggered a drop in the amount of 4G data traffic for the first time since January. The new data reveals that video services are driving 5G, accounting for more than half of traffic in a similar way to 4G.

Korean operators have successfully managed to articulate the benefits of 5G to customers. The way 5G is marketed is via straightforward limited and unlimited data plans. A limited 5G plan costs around 55,000 Korean won (USD 46) per month, unlimited plans start at around 80,000 won (USD 67). The Korean pricing model has worked, the price strategy is good. KT, one of the operators, has done it cleverly. They drew an equal sign between 5G and unlimited, so they are introducing a truly unlimited plan together with 5G. They have four 5G plans in total. Three of them are unlimited and have no speed throttling beyond certain limits. That’s good. As unlimited plans are more expensive they drive the total revenue. People that are interested in 5G will most likely also upgrade.

It’s not just price that presents a barrier to attracting customers. Bad publicity, at least initially, was also part of the puzzle of how best to sell 5G. There was a fair amount of negative sentiment visible in the Korean media. Some people said it is over-hyped, but they still know about 5G. And a portion has actually bought it now.

After seeing a rise in complaints about the quality of service soon after the 5G launch, the government set up a joint private-public taskforce to investigate and solve technical and coverage issues. It has seen a drop in complaints since the working group was established. Tests show all three operators delivered 5G speeds of more than 1Gb/s.

To support 5G network investment, the government offers operators a tax credit of 1 per cent to 3 per cent for a two-year period to reduce their Capex burden. It also provides financial support in the form of loans and funds for innovative 5G start-ups. The operators spent about USD 3 billion on spectrum in the 3.5GHz and 28GHz bands. To encourage the development of 5G products, the government set up 23 5G tests beds focused on five sectors, such as devices, V2X and drones. The government estimates the country will generate 130 trillion Korean won (USD 109 billion) from the production of goods in 5G-related industries by 2026, or 15 per cent of the global market share.

Korea focusses 5G on 10 vertical industries which include Network facilities, 5G smartphone; VR/AR, Wearable, Intelligent CCTC; Unmanned Drone, connected Robot, V2X; Security, Edge Computing. The 5 killer services include Immersive contents, Smart factory, Autonomous vehicle, Smart city and Digital Healthcare. Samsung Electronics Co Ltd early this month said its first foldable smartphone, the Galaxy Fold, will be available in South Korea from Sept 6th with fifth-generation (5G) mobile connectivity. The world's largest smartphone vendor said the device would be priced 2.398 million Korean won (USD 1,977.47).

On its way to garnering more 5G subscribers, the government is positioning itself as a global leader in communication technology. Its dominance in 5G is no surprise. Korea as a nation is ambitious. They set themselves the goal to have about 20 per cent market share globally when it comes to advanced technologies.