December 1 2018 is a landmark date in South Korea’s telecom history, the date when it became the first nation to launch 5G services for B2B customers. Four months later, South Korea was also the first to launch mobile 5G services on 3 April 3, 2019, just one hour before Verizon’s 5G launch in the US.
Fast forward to today, let’s look at how 5G is faring in South Korea.
Operators launched B2B first because enterprise clearly was a strategic focus for them. Today, we see how that played out.
Examples of 5G supporting various verticals abound, including SK Telecom’s partnership with Samsung Heavy Industries building a 5G based autonomous navigation system to allow ships to move to a set destination on their own. And KT, for its part, claims 150 B2B use cases with 53 business agreements secured by the end of 2019.
On the consumer front, as of September 2020, 5G connections accounted for around 15 per cent of total mobile connections in the country, crossing the 9 million connections mark. This sets the stage for our estimate of more than 40 million 5G customers by 2025, accounting for 66 per cent of the total connections.
And beyond connections?
Today, 30 per cent of total data traffic is already being routed over 5G networks nearly doubling its stake within one year. LG Uplus reported the average data usage per customer on its 5G network was more than double 4G at 26.8 GB per month at the end of Q1. The 5G launch also helped the market to stabilise declining ARPU at around $25, starting 2019.
South Koreans are known to be early technology adopters. Coupled with handset subsidies and high consumer awareness, we arrived at the following figures for 5G adoption (see chart, below, click to enlarge).
But this is not whole story. The support from the Korean government to provide tax support to domestic operators if they expand nationwide 5G coverage to 70 per cent by 2025 was also a big contributor to rollouts and uptake: capex increased significantly from less than $3 billion from 2015 to 2018, to more than 2015-2018 to more than $4.8 billion in 2019, with a further $4 billion expected in 2020.
This explains the deployment of 115,000 base stations by operators (76 per cent of the total guidance by the government for a complete roll-out) by March.
This is quite Impressive. But what is the result of this investment and impact on consumers?
OpenSignal data on network performance from October shows:
While initial uptake has been impressive, the above challenges could have a clear, negative impact on South Korea’s 5G roadmap. Even if consumers aren’t directly impacted, the reputational damage could paint 5G in a negative light. But what can be done to remedy it?
To sum it all, while 5G has got off to an incredible start in South Korea, there is still much territory to be explored. The commercialisation of 28GHz and SA 5G networks will unlock a wider range of opportunities in the enterprise sector, while addressing coverage and device demands should help to retain and attract customers on 5G.
It will be interesting to see how it all evolves.
– Ankit Sawhney – research manager, and Mansi Goel – research analyst, GSMA Intelligence
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.Subscribe to our daily newsletter Back