KT chief warns of slow 5G adoption
KT CEO Hyeon-Mo Ku has issued a warning over slow 5G takeup, urging operators to shift to the business-to-business market and to deploy it as a platform rather than a network.
Ku told the GSMA Thrive online conference Wednesday that South Korean operators had achieved "the fastest growth rate in the world," gathering up 6.3 million 5G subs, or 9% of the total, in the first year.
But even so, he acknowledges takeup had been "lower than expected, especially when compared to LTE," which grew almost twice as fast in its first year. Some 16% of South Korean subscribers converted to the new network, rushing to embrace the emerging new world of smartphones and mobile data.
Ku, who formally took over the top job at KT on March 30, said KT and other 5G competitors had primarily targeted consumers, recording a small bump in ARPU as a result.
"However, the telecommunication market is not the same as in the past. Competition is getting fiercer, profitability is falling and government regulation is still a barrier to growth," Ku said.
5G offered limited prospects in the consumer market because 5G and LTE devices "are too similar to differentiate the value."
Telcos need to create a vision in the B2B sector, which offers much greater scope for differentiation and is not subject to government regulation.
"Above all, B2B customers will have a willingness to pay, as they can see the benefit for their business," Ku said.
"They see telecommunications services as an input, not as final product. For these reasons, there is a huge opportunity in the B2B market, and that is where we should be heading."
He said KT had created more than 150 corporate apps for 90 businesses, referencing use cases in media, healthcare and education.
He cited a video management solution integrated with a 10Gbit/s 5G link, allowing production teams to edit huge video files via mobile cloud rather than having to physically deliver them, cutting days off their schedule.
But Ku said the industry faced some obvious challenges, such as the need to get 5G modules quickly to market, and telcos' lack of domain knowledge in key verticals.
Operators also need to convince enterprise customers of the value of 5G. "It's our responsibility to clearly identify customer value in 5G by specifying the differences from WiFi and LTE."
Ku also cautioned that 5G itself cannot lead the expansion of adoption in B2B.
"5G is an infrastructure. How the other elements, such as data, AI and cloud, integrate and create synergy will be key to widespread adoption of 5G in B2B," he said.
"5G should not be considered as a network. If operators continue to look on 5G as just another network they will end up doing pricing and selling devices as in 4G.
"You cannot expect to make profit from 5G this way. 5G is a platform. We need to see 5G as a platform – and make it possible for various players and even consumers to join and create value."
— Robert Clark, contributing editor, special to Light Reading