|Seen is a store in downtown Seoul that sells telecommunication services for SK Telecom, KT and LG Uplus smartphones. Yonhap|
By Baek Byung-yeul
Korea's major telecommunications companies ― SK Telecom, KT and LG Uplus ― are forecast to disclose upgraded earnings for the fourth quarter of 2021 thanks to increased numbers of subscribers to 5G networks, but criticism is growing as many consumers feel the quality of their 5G services is still below expectations in terms of speed and coverage.
According to data from market tracker FnGuide, Monday, the three mobile carriers are expected to show year-on-year growth in the double digits to 813.5 billion won ($682 million) in combined operating profit in the fourth quarter.
By company, SK Telecom is estimated to record 342.6 billion won, KT 253.6 billion won and LG Uplus 217.3 billion won.
Experts said the improved earnings stem from an increase in 5G service subscribers. According to data provided by the Ministry of Science and ICT, the number of 5G subscribers to the three major mobile carriers stood at 201.8 million as of last November.
The data showed that 27.8 percent of all mobile service subscribers used 5G networks. "Mobile carriers are expected to see improved earnings thanks to the rising 5G subscribers. Also, the three companies have reduced spending by avoiding excessive marketing competition," said Lee Seung-woong, an analyst at eBest Investment & Securities.
Despite the good numbers, complaints about 5G quality are continuing to grow. Many 5G users have experienced their network switching abruptly to LTE from 5G due to the narrow coverage.
According to a recent survey of 1,000 5G users conducted by local civic organization Voice for Consumers, the average amount of 5G data consumers received from mobile carriers was 60.9 gigabytes while their actual data usage averaged 31.1 gigabytes. The survey indicates consumers are not using 100 percent of their data due to the narrow coverage of 5G or enjoyable contents.
The major cause of the 5G quality issue is a lack of network base stations. Given 5G frequencies are more straightforward than LTE, making it difficult to bypass radio waves, mobile carriers are required to install more base stations to provide proper 5G services.
But the three mobile carriers have slowed down their facility investments. The three companies' combined facility investments amounted to 4.5 trillion won up to the third quarter of 2021, down 9.9 percent from the same period of 2020.
In regard to the 5G quality issue, ICT Minister Lim Hye-sook met with CEOs of the three companies and asked them to "expand facility investments to improve 5G quality." The CEOs responded that they will maintain a level of facility investment similar to 2020 levels.