SK Telecom CTO: 'We Need New Business Models for 5G'

CTO of South Korean telco says the investment requirements of 5G are forcing operators to come up with new business models.

Gagandeep Kaur, Contributing Editor

January 12, 2018

7 Min Read
SK Telecom CTO: 'We Need New Business Models for 5G'

South Korea's SK Telecom has been in the limelight over the past year as one of a handful of service providers playing a key role in the development of a global 5G ecosystem. Among other things, it has teamed up with Ericsson AB (Nasdaq: ERIC) and BMW on what it claims is the world's first 5G connected car, developed fronthaul technology the South Korean government has backed as a standard, and deployed a 5G trial network in the country's "K-City," a testbed for emerging technologies. (See SKT Tests Put 4G in Touching Distance of 5G.)

But the operator's 5G development strategy is not just about industry tests. Besides collaborating with vendors and other telcos on the development of a 5G ecosystem, SK Telecom (Nasdaq: SKM) also wants to ensure that consumers can experience 5G technologies as soon as possible. It plans to roll out 5G in early 2019.

In an interview with Light Reading, Park Jin-hyo, SK Telecom's chief technology officer, talks at length about the company's 5G research areas, challenges associated with deploying 5G, return on investment concerns and how 5G will change the nature of the telecom industry.

Light Reading: How are you preparing SK Telecom's networks for the 5G?

Park Jin-hyo: We are closely working with global ICT partners to build 5G test networks covering various communications scenarios. To achieve this goal, we played a leading role in cooperation with mobile carriers and equipment vendors around the world, such as AT&T, NTT DoCoMo and Ericsson, to speed up the 5G schedule. Furthermore, we have been following up with the progress on the 3GPP standardization of the initial 5G system, which has just completed [in December 2017], and are working closely with Ericsson and Qualcomm to develop the world's first 3GPP-based 5G infrastructure and device. We have [already] demonstrated key features of 5G such as high-speed data delivery and ultra-low latency. (See 5G Is Official: First 3GPP Specs Approved.)

At the same time, we are also offering the chance for customers to experience 5G pilot services in advance. In cooperation with Ericsson and BMW, we built the world's largest 5G test network at the BMW Driving Center in Yeongjong Island, South Korea, and introduced the world's first 5G connected car. We also established a 5G test network and put on display a variety of 5G services including live conferencing, 5G connected cars, multi-view streaming and augmented reality in Incheon city last year.

At a global 5G event in November 2017, we presented differentiated 5G pilot services including the world's first 5G-LTE link, the 5G network-based autonomous driving, network virtualization and tablet-based AR/VR services on 5G networks.

Recently, we also built the nation's first 5G test networks for autonomous driving in K-City, a city-sized testbed set up by the Korean government.

LR: By when are you planning to launch commercial 5G services?

PJ: As for commercialization, we sent a Request For Information (RFI) in April 2017 and a Request For Proposal (RFP) in July 2017 to our partners in 5G. We plan to roll out 5G networks in early 2019, so that we can lead the 5G market and deliver differentiated values to customers.

In South Korea, the Ministry of Science and ICT will complete the spectrum auction for 5G within the first half of 2018. This will add further momentum to the nation's efforts to commercially deploy 5G networks for the first time in the world.

We believe, given the nature of high frequencies, that 5G networks will be deployed in certain hotspots or areas and then will expand coverage in a phased manner. Considering the level of investment required to deploy 5G networks, the nationwide rollout will take some time. Therefore, even if 5G networks are commercialized, LTE-A networks with gigabit speeds will be complementary to 5G networks for a while. And 5G networks are expected to become the main ones after 2020.

LR: What kind of challenges do you anticipate in deploying 5G networks?

PJ: 5G networks need a specific plan for the use of 5G frequency bands, considering the features of 5G services.

The 28GHz band offers ultra-wide bandwidth, enabling large-volume, ultra-high-speed data transmission. But radio waves in the band are unlikely to circumvent obstacles due to their nature, making coverage for 5G services shorter. On the contrary, the 3.5GHz band's features are longer distance with better performance at circumventing obstacles, delivering the stability needed in terms of coverage for wide areas.

Considering these features, we are planning to optimize the design of networks by introducing the 28GHz band in densely populated urban areas and the 3.5GHz band in other areas. For this reason, we are enhancing our network designing capabilities for an optimal network structure, using beamforming technology. Also, we have developed a new RF relay solution to address the issue of radio shadow areas, an issue that can arise from the nature of the 5G frequency bands, and successfully demonstrated its performance last year.

In addition, in the 5G era, when a device can transmit data at a rate of up to 20Gbit/s, wired broadband connections are essential for both fronthaul and backhaul. That is why we continue to make investments in wired connections for 5G.

Next page: Spectrum considerations

Spectrum considerations
LR: Which spectrum band is best for 5G services?

PJ: We are currently developing equipment for 5G infrastructure which can operate in both the 3.5GHz and 28GHz 5G bands, and still considering a variety of options to deliver the best 5G experience to our customers.

We are discussing how to combine the nature of these frequency bands with the optimal design of network infrastructure to offer our differentiated services to our customers. For example, different frequency bands can be employed depending on 5G network applications. Applications like autonomous driving and robotics require require stable connections, and so the 3.5GHz band is best. For those demanding high-speed, large-scale data transmission, like AR/VR and media services, the 28GHz is more suitable.

We have also demonstrated a solution we call "perfect 5G" which involves interworking between 3.5GHz, 28GHz and LTE bands.

LR: What are the focus areas for your 5G research?

PJ: Regarding infrastructure technology, we are currently working on wireless data transmission technology -- for example, massive MIMO, cmWave/mmWave and Multi-RAT -- and the optimal network design capabilities for large-volume, ultra-high-speed data transmission. In addition, we are developing advanced technologies, such as full software-defined networking and virtualization leveraging network cloud and platform technologies. We are also looking at innovative MEC [Mobile Edge Computing] architecture design and deployment, as well as network-as-a-service, big data and AI-based network operations to ensure service stability.

When it comes to ICT service offerings, our research is focused on 5G network applications, such as AI, autonomous driving, quantum cryptography and device optimization for different services.

LR: A section of the industry has raised concerns about the business models for 5G. Is that something that concerns you?

PJ: 5G is expected to require more investment than LTE networks. That is why we need to come up with an innovative business model and to dedicate our resources to the development of a new business model for the commercial 5G services.

South Korea's three mobile operators have successfully provided world-class LTE services. Unfortunately, however, the biggest beneficiaries have been over-the-top providers, such as Google, Facebook and Netflix. Thus, we are making investments in a new business model for 5G services. We are working on various scenarios for 5G services, such as mMTC [massive machine-type communications] and URLLC [ultra-reliable and low latency communications], in order to develop new B2B services like autonomous driving, robot communications and public safety systems.

Also, we will complete the commercial deployment of 5G networks as early as the first half of 2019, to firmly establish our presence in new services and apply new business models to these services.

Our vendors, such as Samsung, Qualcomm and Huawei, will launch commercial modems for 5G smartphones in December 2018 and are expected to release 5G smartphones six months later, in June 2019. However, we will align ourselves in the Korean government's plan for commercial 5G networks and closely work with our device and chipset partners to move up the schedule to the first half of 2019.

— Gagandeep Kaur, contributing editor, special to Light Reading

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About the Author(s)

Gagandeep Kaur

Contributing Editor

With more than a decade of experience, Gagandeep Kaur Sodhi has worked for the most prominent Indian communications industry publications including Dataquest, Business Standard, The Times of India, and Voice&Data, as well as for Light Reading. Delhi-based Kaur, who has knowledge of and covers a broad range of telecom industry developments, regularly interacts with the senior management of companies in India's telecom sector and has been directly responsible for delegate and speaker acquisition for prominent events such as Mobile Broadband Summit, 4G World India, and Next Generation Packet Transport Network.

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