South Korean Telcos Count Cost of 5G but Talk Up New Services

South Korea's pioneering 5G operators are looking at a fall in profit after racing 5G to market. But fear not – 'immersive' apps are on the way.

Robert Clark, Contributing Editor, Special to Light Reading

July 25, 2019

3 Min Read
South Korean Telcos Count Cost of 5G but Talk Up New Services

Good news and bad news from the 5G front in South Korea.

Since their joint April 3 launch, the three operators -- KT, SK Telecom and LG Uplus -- are racking up subscribers at a record clip.

They passed the 1 million mark in early June, beating the time it took 4G to reach that milestone, and have since picked up the pace, with total users now likely to exceed 2 million.

The bad -- or baddish -- news is that they are counting the financial cost of being the world's first fully fledged 5G market.

Each operator is set to post weaker quarterly earnings because of rollout and marketing costs.

Analysts estimate that Q2 revenue will be flat and aggregate operating profit will be down 13% year-on-year, Yonhap News Agency reports.

Earnings of the smallest operator, LG Uplus, are tipped to plunge 18% because of its hefty phone subsidies. Market leader SK Telecom is forecast to post a 7.6% decline in profit and KT is looking at a 14.5% drop.

Users who choose hoping for extra speeds may also have been disappointed, amid reports that speeds have not been as high as first promised.

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But against these predictable early issues, the operators can take some heart from improvements in network performance and new opportunities that are appearing.

Lee Sun Woo, the head of KT's Infra Research Lab, has painted the picture of a more responsive network offering richer new applications.

Speaking at MWC Asia last month, he said data consumption per user had increased more than three times compared with LTE.

By the end of June, KT had installed more than 32,000 basestations in six cities and Jeju Island, covering residential areas, highways, railways, airports and shopping malls.

Lee said one of the big differences is the lower latency, a result of the different architecture as well as the tight integration between 5G new radio and the fiber backhaul.

"We believe optical fiber has played a significant role in achieving the deployment of 5G," he said.

Latency at the edge is down 44%, while across the mesh network it is 63% lower.

KT has already developed a dozen immersive apps for consumers and businesses.

One popular consumer app allows users to view the world in 360 degrees and share high-quality pictures and video in real time.

A baseball app allows viewers to choose their viewpoint from the field, and a live TV app with a head-mounted VR display delivers a "personal IMAX."

On the B2B side, Lee pointed to an AR collaboration app using AI glasses.

"This will help you collaborate with your colleagues working at a different site," he said. For example, an architect can work remotely with colleagues on a building site.

It has also developed a hybrid drone-Skyship for public safety agencies, integrating drones and 5G connectivity with a greater range and flying time.

Marc Einstein, the chief telecom and digital services analyst at ITR Corp Japan, said South Korea's fast 5G rollout "has more to do with the government's national technology strategy than it does with providing service to users and business just yet."

But he said developing the network so quickly would benefit local handset and network vendors.

"Samsung has a chance to become a major 5G radio vendor given the global controversy in the market now and their partnership with NEC," he said. "They have a leading market share with all three Korean telcos and are making traction in the US market, so this is something to watch."

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— Robert Clark, contributing editor, special to Light Reading Light Reading

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About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech ( 

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