top of page

5G to enable MSME ecommerce and new services – Korea paving the way

Many developing countries are still working to roll out 3G and 4G networks. The 5G era is fast approaching, though, and this technology will be a key differentiator in the global digital economy. In a survey of over 3,000 industry leaders from around the world, 83 percent expect 5G to catalyze small business growth and tighten global competition, and nearly 70 percent worry their country will become less competitive in the online economy without 5G.

South Korea has had a strong national focus on high-quality and high-coverage internet since the 1980s. It has the world’s fastest internet (41 Mbps in 2016) and was one of the first countries to formally announce the adoption of a 5G mobile network, with a target of 90 percent 5G penetration by 2026. In 2015, Korea launched the so-called 5G Strategy Promotion Committee, comprised of members from both public and private sectors such as telecom and industry leaders from automotive, healthcare, and education, drafted the “5G+ Strategy” and is studying 5G converged services.

According to the Korean telecom operator SK Telecom, 5G yielded in demos speeds of up to 19.1 gigabits per second, nearly 1,000 times faster than 4G LTE. This speed allows a movie to download in fractions of a second and makes a critical difference in sectors where lags in data transmission can be life-threatening, such as when driving a car and depending on the network for navigation, or when a surgeon is operating remotely from a virtual reality headset.

In addition to low latency, 5G offers high capacity to transmit information. As such, it is poised to fuel the digitization of Korean industries and power the machine-to-machine dialogue and transfer of large-scale data essential in Internet of Things. It is also expected to benefit consumers and companies in such sectors as media and entertainment, public transport, healthcare, energy and utilities. It will also enable ecommerce; Korean telecoms SK Telecom and LG U+, that have already ventured into ecommerce by offering cellular-based wireless payment platforms that allow small retailers, traders and vendors to transact, and expected to use 5G networks to amplify these offerings.

The Korean Ministry of Science, ICT and Future Planning has invested heavily in 5G. By February 2020, after more than half a year of 5G deployment, some 5 million people in Korea had adopted 5G, and Korean 5G networks were carrying almost a quarter of Korea’s wireless network traffic. Korean users with 5G purchased unlimited data plans with much greater frequency than when using 4G or 3G, suggesting they would be likely to use 5G. 2 million people subscribed to 5G in 4 months, a faster adoption rate than with 4G.

Price points have helped. The price points for 5G in Korea vary from about US$69 per month to US$112 per month depending on desired speeds. In general, Korean as well as U.S. price points are considered moderate, designed by operators to drive adoption. China, which is poised to become the world’s largest 5G market by 2025, has gone even further by offering limited data 5G connections at very low price points (as low as $18 per month). European operators pursued the opposite approach, applying premium pricing to maximize early 5G revenue per user.

43 views0 comments


bottom of page