South Korea was the first country to commercially launch a nationwide 5G network in April 2019, a feat made possible when all three of the mobile network operators in the country simultaneously switched on 5G. As we approach the first anniversary of that milestone — arguably one of the world’s most successful network rollouts — it’s a good time to review best practices we can learn from that example.
Everyone understands the long-term promise of 5G networks: Enabling a wealth of new use cases and capabilities, such as autonomous cars, augmented and virtual reality (AR/VR), remote surgery, industry 4.0 and many more. Yet opinions about the practical use cases for 5G in the short term have been quite polarized, with the prevailing belief that 5G will be more important to businesses than consumers.
Interestingly, however, more than 4 million South Korean consumers have already signed up for 5G service since its rollout, demonstrating that 5G networks are quite attractive to consumers as well. Operators can look to the South Korean launch for three key factors coming together to create a successful 5G launch; e.g., governmental policy, an ecosystem of vendors and partners, and operator business strategy.
Governmental policy
The government in South Korea is highly motivated to establish itself as a leader in communications and semiconductor technologies, driven in large part by economic factors. Doing so for 5G began in January 2014, when global 4G deployments were still in their infancy. Nevertheless, the Korean government announced its 5G strategy at that time, underscoring its importance with an initial investment of $1.5 billion. And the government’s support of 5G has only grown since that time.
For instance, the government advanced its 5G spectrum auction a year ahead of plans. It also made available a total of 280 MHz in the 3.5 GHz band and 2,400 MHz in the 28 GHz band, which ultimately cost operators $3.3 billion. By contrast, Germany’s 5G spectrum auction took place in July 2019 — three months after South Korea launched its nationwide network — but operators paid $7.3 billion for far narrower bands.
Additionally, the South Korean government created a 5G strategy committee that enables carriers and vendors to promote public-private coopetition to speed 5G buildout, circumventing the limitations created by proprietary isolation.
Ecosystem for everyone
This spirit of coopetition attracted 5G network vendors and technology partners in the very early stages of South Korea’s 5G buildout. The benefits to vendors are clear:
- An excellent beta market in which to experiment with future technologies
- The ability to shape industry and technology standards vs. merely complying
- Mitigated risk of research and development through the funding and contribution of other alliance members
- Strong market adoption driven by the early adopter nature of South Korean consumers.
It is therefore clear that both vendors and operators had much to gain from an early successful launch and tight cooperation, and their investment and commitment to the process reflects that.
Strategy for success
Of course, we need to recognize that the three South Korean operators, SK Telecom (SKT), Korea Telecom (KT) and LG U+, assumed considerable risk. These operators made massive investments to deploy 5G despite the fact that operators around the world are experiencing significant network commoditization and eroding margins.
One key factor in their success was their strategy of rolling out a massive network that encompassed 85 dense urban areas from the start. By focusing on highly populated areas like universities, high-speed trains and metropolitan subways, the South Korean operators gave consumers an immediate benefit from the 5G network.
Another important aspect is the spirit of coopetition that enabled the operators to work toward a shared deployment model supported by the Korean government. Doing so allowed the three companies to achieve faster deployment over a broader area and split the deployment costs — a move that resulted in $1 billion in savings over ten years.
But deployment is only one step in developing a 5G network; what you do with that network is critical to success. And this is another area where the three operators excelled, actively introducing new services to fuel the demand for 5G while also differentiating themselves. To that end, each operator worked with different partners to distinguish themselves by offering unique content and experience use cases in the 5G market, including:
Immersive VR/AR experiences: Drawing upon the massive popularity of sporting events among South Koreans, SKT developed the proprietary TReal and eSpace platforms for a more immersive experience. Baseball fans access real-time data and stats by pointing their smartphone camera at a baseball player. By pointing a VR headset at the field, a fan can watch as the game is streamed from eight different angles. During the opening day of the Korea Baseball Organization, fans watching the game through VR headsets in the SK Happy Dream Park saw a large fire-breathing dragon flying around the stadium.
Enhanced media: LG U+ Idol Live is a popular application for fans of K-Pop, enabling them to focus on an individual idol and enjoy the stage as if they were sitting in a real theater. Users can even practice their dance moves together with their idol. Meanwhile, SKT created social VR that enables users to create a digital clone that can travel to virtual and real environments.
Enterprise applications: All of the South Korean operators continue to invest in developing 5G use cases for industry, B2B and utilities markets. For instance, SKT’s 5G-AI Machine Vision is a smart factory solution that uploads high-resolution, multi-angle photos to a cloud server via a 5G router, instantly identifying defective products on a conveyor belt. KT, meanwhile, boasts more than 140 5G B2B services, including the 5G Safety Platform, which helps reduce losses from typhoons and earthquakes. KT’s Global Epidemic Prevention Platform (GEPP) is a smart quarantine system used for disease prevention.
Thus far, all three South Korean operators have experienced a spike in data consumption, with slight increases in average revenue per user (ARPU) — numbers that will continue to improve as early 5G use cases succeed and flourish. More importantly, however, these operators established a successful strategy for monetizing the 5G network that should be evaluated and potentially replicated around the world.
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