② “5G service is not available and is frequently disconnected”… Even without investment from the three telecommunications companies, this year’s operating profit will approach 5 trillion won.
#Mr. mother-in-law (40) goes to work at an office on the first basement floor of a building in Hwagok-dong, Gangseo-gu, Seoul. He is a customer of SK Telecom’s ‘5GX Prime Plus’ plan, which costs 99,000 won per month and provides unlimited data without speed restrictions . Mr. Jang contacted SK Telecom’s customer center last July because 5G (5th generation mobile communication) did not work in his office, and his staff later began an on-site inspection. However, the answer he received was, “In this area, 5G was not originally available, only LTE (4th generation mobile communication).” Mr. Jang complained, “I don’t know why I have to pay more expensive 5G fees when I don’t even have a 5G network.”# #Inseong
Kim (39), who works in distribution between Jindo-gun and Haenam-gun, Jeollanam-do, changed his device to the Galaxy S23 early this year. Switched from LTE to 5G. Mr. Kim uses LG U+’s ‘5G Signature’ plan, which costs 130,000 won per month and provides unlimited data without speed limits. He said that although he is paying 20,000 won more per month than in the LTE era, he feels that 5G data is interrupted more easily. Mr. Kim complained to the LG U+ dealership and said, “Due to the lack of 5G base station installation, the mobile network must be replaced with ‘ LTE.The response was, “There is no other way than changing to ‘priority mode.’” # The three telecommunications companies, including
SK Telecom, KT , and LG U+, boasted of ‘ speed 20 times faster than LTE ’ when they first commercialized 5G in April 2019. has now become a public flame. The problem is that 5G does not work well in some areas of the country. Therefore, the complaints of consumers who use 5G are hardly being resolved. According to the ‘Analysis of Domestic Mobile Communication Service Usage Patterns’ report published last year by the Electronics and Telecommunications Research Institute (ETRI), the overall satisfaction with 5G services was only 23% in a survey conducted on 2,048 people nationwide in October
2021 . . This is a lower figure than the survey results in December 2020 (30%), the previous year. The biggest reason why 5G subscribers were dissatisfied with the service was ‘speed similar to LTE (55%).’ The biggest reason why LTE users do not want to use 5G was ‘expensive fees (58%).’ When using 5G, which is more expensive than
LTE , service quality should be good, but service quality is not improving due to lack of facility investment efforts by the three telecommunication companies. In this situation, if a consumer who does not want 5G purchases a new 5G mobile phone, LTEI can’t sign up for the rate plan. Last July, the government announced that it would put a stop to this practice and allow users to choose their preferred rate plan between LTE and 5G regardless of the type of terminal . However, this has not yet been implemented, and in an era of high inflation, consumers are being forced to subscribe to 5G when they buy the latest phone. The three telecommunications companies are humming along as they celebrate their performance thanks to the increasing number of 5G subscribers. Shin Cheol-won, head of the policy team at Citizens’ Association for Consumer Sovereignty, said, “Charging high rates without providing faster LTE speeds than the three telecommunications companies
originally promised is an act of fraud,” and added, “I don’t know why consumers should bear the cost of not keeping their promises.” . Kim Sang-bong, professor of economics at Hansung University, said, “ As the difference between LTE and 5G is unrealistic, telecommunication companies must allow consumers to freely choose their rate plan.”
Three telecommunications companies, profitability improves as 5G subscribers increase… Korea ranks 25th
in OECD in terms of ratio of facility investment to sales of telecommunication companies
According to the Financial Supervisory Service’s Electronic Disclosure System on the 6th, the three telecommunications companies posted an operating profit of 4.3835 trillion won last year. Compared to 2019, when 5G was commercialized, operating profit increased by more than 48%. The combined operating profit of the three telecommunications companies was only 2.9455 trillion won in 2019, but thanks to the increase in 5G subscribers, it exceeded 3 trillion won in 2020 and then exceeded 4 trillion won in 2021 and last year. It is generally known that
5G subscribers have an average revenue per subscriber ( ARPU ) that is more than 1.5 times higher than that of LTE . According to the Ministry of Science and ICT, the number of 5G subscribers nationwide reached 30.76 million as of June this year. Compared to the end of June last year, it increased by 25.1% in one year. The increase in the number of 5G subscribers more than doubled from 4.67 million in 2019 to 11.85 million in 2020, and has been recording around 8 million for two consecutive years from 2021. The three telecommunication companies’ profitability is improving day by day due to the increase in 5G subscribers, but they are passive in facility investment. According to the Ministry of Science and ICT, the facility investment of the three telecommunications companies peaked at KRW 9.5965 trillion in 2019, when 5G was commercialized, and has remained at KRW 8.2 trillion for three consecutive years from 2020 to 2022. According to the Global Mobile Communications Association ( GSMA ), the ratio of facility investment to sales of Korean telecommunications companies was 13.9% last year , ranking 25th among 31 member countries of the Organization for Economic Co-operation and Development ( OECD ). OECD
The average rate among member countries is 22.2%.
By giving up 28GHz, facility investment will decrease further this year… “Passive in infrastructure investment for the future”
This year, the three telecommunication companies’ facility investments are expected to decrease further. There are 28 GHz and 3.5 GHz 5G frequency bands, and the three telecommunications companies gave up the 28 GHz band at the same time on the grounds that it was ‘unprofitable’. 28GHz is the core frequency of 5G, which will achieve speeds 20 times faster than LTE . However, the three telecommunications companies were negligent in investing in 28GHz base stations. Looking at their 28GHz investment performance, SK안전놀이터 Telecom only recorded 5,059 units, KT 1,586 units, and LG U+ 1,868 units. The achievement rate is only 10.7%, 10.6%, and 12.5% of the volume promised to the government. In the end, the government received the frequency back from SK Telecom in May of this year, following KT and LG U+ at the end of last year. According to the industry on the 6th, based on the nationwide network, 150,000 LTE base stations and 120,000 5G base stations have been built, so 5G is still below the level of LTE .
When the government introduced the ‘Measure to Promote Competition in the Telecommunications Market’ last June, it revised the ‘Mobile Communication Terminal Device Distribution Structure Improvement Act (SMTongong Act)’ instead of abolishing it, thereby reducing the burden of marketing expenses on the three telecommunication companies. Thanks to this, the three telecommunications companies are expected to have an operating profit of 4 trillion won this year. They have already made an operating profit of 2.5687 trillion won in the first half of this year.
Hong Jin-bae, head of the network policy office at the Ministry of Science and ICT, said, “The cancellation of the 5G 28GHz frequency allocation by the three telecommunications companies shows that they are passive in investing in infrastructure for the future.”“We tried, but customer expectations were high”… During the LTE era, the three
In the ‘6G (6th generation mobile communication) white paper’ released on the 10th of last month, SK Telecom explained that the reason for the failure to revitalize the 5G market was the lack of an environment for the growth of the ‘killer service’ that would shape the market. SK Telecom said, “Due to the frequency characteristics, 5G requires the construction of more base station equipment compared to LTE to build a nationwide network, ” and added, “We made a lot of effort to shorten the construction period and secure coverage, but customers are unable to achieve the same level of coverage as LTE in a short period of time.” “I wanted it,” he said. An official in the telecommunications industry said, “In the end, it is a question of which comes first, the chicken or the egg, and content and solutions must develop together with infrastructure.”
Experts emphasize that we should not forget that the government, telecommunications companies, and handset manufacturers worked together as a ‘one team’ and as a result, Korea has become a global information and communication technology ( ICT ) powerhouse today. Yang Jun-mo, professor of economics at Yonsei University, said, “ When LTE was commercialized, the three telecommunications companies rushed to make aggressive investments, but as the oligopoly structure of the three companies sharing has solidified, they are not investing and are becoming complacent.” He added, “In a situation where 5G cannot be experienced at all, it is difficult to sign up for a 5G plan. He pointed out, “It is an unreasonable business practice to induce.”
telecommunications companies made aggressive investments.