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| A female passes by a 5G promotion wall at KT Square in central Seoul. / Yonhap |
By Kim Hyun-bin
SKT, KTand LG Uplus have long boasted of their fifth generation (5G) network, emphasizing that they were "the world's first to commercialize 5G." However, the quality of the network has not been up to par offering far less speed than U.S. leading mobile carrier Verizon, which a recent report revealed offered the fastest 5G network in the world.
According to OpenSignal's report, Verizon has the fastest 5G network in the world offering 506.1 megabits per second (Mbps), followed by LG with 238.7 Mbps, SKT with 220.6 Mbps and KT in fourth with 215 Mbps. All three telecom companies offered less than half the speeds of that of Verizon.
Last April, local telecom companies became the first to commercialize 5G but the success was short-lived as Verizon currently provides much faster data services. The U.S. firm is the only company that offers its 5G network at 28㎓ frequencies. Local carriers aim to introduce the services in the latter half of the year.
The 5G technology is far from complete and telecom companies are burdened with making bold investments in the coming years.
"There is expected to be large-scale investment in the 5G mobile system and in the Core Network and infrastructure investments such as Stand Alone (SA). However, the cost for the Core Network for the SA system is much higher and becoming a burden on local telecom companies," Kim Young-jae, a senior analyst at NICE Dun & Bradstreet, said.
Also heavy government restrictions and the COVID-19 pandemic have delayed construction of 5G base stations and related technologies.
At a time of need the government needs to step up efforts to aid the telecom companies in the form of subsidies and tax exemptions for investments in 5G and supporting technologies, in addition to reducing unnecessary government restrictions mainly the Mobile Device Distribution Improvement Act which took effect Oct. 1, 2014.
The act significantly decreased the profitability of mobile carriers thus lessening the amount of investment in innovative technologies such as 5G.
The government needs to abolish the Mobile Device Distribution Improvement Act, which was aimed initially to protect consumer product discrimination as mobile users had to bear disadvantages such as mandatory subscription to unnecessarily costly mobile plans to receive "free" phones and bearing high cancellation fees when canceling before their contracts expired.
Calls have been growing to abolish or make significant revisions to the act as it drastically reduced competition among mobile carriers and blocked any means for consumers to receive major discounts when acquiring new smartphones.
"If the government abolishes the Mobile Device Distribution Improvement Act it will increase competition among the major telecom companies and in turn consumers could benefit more with cheaper mobile phones and plans," an industry official said.
According to statistics recently released by the Korea Information Society Development Institute, SKT dominates the market with 47.3 percent of the total number of subscribers at the end of 2018 followed by KT with 29.8 percent and LG with 22.9 percent.
The market share difference between the country's top two mobile carriers was 18.9 percentage points apart, which is 5.4 percentage points higher than average OECD member countries. Industry watchers believe the gap needs to be reduced further through an increase in competition that could create more benefits for consumers.
