South Korea has been the epicenter of the early 5G market, as carriers including LG U+ have been quick to build and launch services based on the technology. In a recent interview at Mobile World Congress 2021, Dr. Lee Sangchul, former CEO of LG U+ explained how the carrier has benefitted from its early 5G entry, and how it promises to open even more opportunities in the future.
For South Korea’s LG U+, the strategy behind its growing 5G service is as much about speed to market as it is about faster data throughputs. The carrier’s experiences offer a valuable case study for other providers.
Dr. Lee Sangchul, former CEO of LG U+ explained how the carrier has benefitted from its early adoption and rollout of 5G services.
The benefits aren’t hard to see. LG U+ has arguably been the most aggressive in launching 5G services, using network equipment and handsets supplied by Huawei. At year-end 2020, about 2.76 million LG U+ customers – or about 16.5% of its customer base – subscribed to 5G services, according to the company’s fourth quarter earnings report. It added 583,000 net 5G subscribers in the quarter, contributing to a 6.7% increase in LG U+ wireless service revenues. Based on this growth, the company projects its 5G customer base will constitute 40% of total customers by the end of 2021.
Network performance and a growing footprint are big reasons for the success of the carrier’s 5G service. A recent Root Metrics speed test report showed that LG U+ has the fastest 5G download speeds among South Korean mobile carriers, posting an impressive 476.5 Mbps throughput in Seoul. LG U+ also claims the largest 5G footprint in South Korea, covering 6,064 square kilometers as of December 2020.
Across all South Korean carriers, the 5G customer base of LG U+ stands at more than 10 million of the country’s 50 million population. “So in terms of 5G, I would say yes – we have entered the market successfully,” Sangchul said. “However, this is just the beginning – it’s not close to a fully grown advanced network yet.”
That’s because speed isn’t 5G’s only capability – with higher reliability and lower latency, the new technology also enables a range of new services that are currently in the early stages of development. “On the consumer side, LG U+ has already added 5G Augmented Reality (AR) and Virtual Reality (VR) applications, offering an entirely new video experience,” Sangchul said. It also recently launched 5G Smart Home Pack, pairing Internet of Things devices with 5G connectivity, and it recently staged a demonstration of a 5G-based self-driving car with autonomous parking capabilities.
But while consumer applications are grabbing the headlines, Sangchul thinks the greater opportunity may well be in the B2B space, where 5G applications promise to improve operations, productivity and revenue.
“5G provides new experiences, new benefits, but all this is still the tip of the iceberg. Especially as industries begin to realize that they could double or even triple their output with fewer resources, they will appreciate the advantages of this new technology,” he explained. “They will see that throughput means not just of 5G but of associated solutions such as edge computing, AI, IoT, cloud and big data. So it’s just blooming now, you know. As industries understand that this is just the beginning and something new and better, and bigger things are coming, the rate of 5G adoption will increase and within three to five years the B2B area will be much bigger than the B2C area.”
These benefits, however, require carriers to move quickly into launching 5G services.
“The telecom business is very different from the manufacturing business – once you invest, the return comes very slowly and not for the first couple of years at least. You have to understand that,” Sangchul said. “And second thing is, do it earlier than others. There are many benefits if you do it earlier. You get the first fruit or benefit of the early adopters – typically about 5-7% of the user universe,” he added.
At the same time, Sangchul sees 5G as not just a network technology but rather an entire ecosystem. “The value of 5G is even more impressive, because if you use edge computing, AI, IoT, cloud and big data all along, then I would say 5G is not a network anymore – 5G is a big system that will provide real-time value to the right people. So if you realize the value of the people, then you will have a very successful 5G system,”
Sangchul is not alone in seeing 5G as not just another, fatter data pipe. Granted, it has supported higher average revenue per user (ARPU) levels for LG U+, but there is much more to it. “Most importantly, measurements, discussions and experience from the real world show us that 5G can become much more than a productivity layer,” said Dimitris Mavrakis, senior research director at ABI Research. “The lesson providers can draw from Sangchul and LG U+ is that 5G that’s properly planned and deployed can become a platform for third parties.”
Network performance and a growing footprint are big reasons for the success of the carrier’s 5G service. A recent Root Metrics speed test report showed that LG U+ has the fastest 5G download speeds among South Korean mobile carriers, posting an impressive 476.5 Mbps throughput in Seoul. LG U+ also claims the largest 5G footprint in South Korea, covering 6,064 square kilometers as of December 2020.
Across all South Korean carriers, the 5G customer base of LG U+ stands at more than 10 million of the country’s 50 million population. “So in terms of 5G, I would say yes – we have entered the market successfully,” Sangchul said. “However, this is just the beginning – it’s not close to a fully grown advanced network yet.”
That’s because speed isn’t 5G’s only capability – with higher reliability and lower latency, the new technology also enables a range of new services that are currently in the early stages of development. “On the consumer side, LG U+ has already added 5G Augmented Reality (AR) and Virtual Reality (VR) applications, offering an entirely new video experience,” Sangchul said. It also recently launched 5G Smart Home Pack, pairing Internet of Things devices with 5G connectivity, and it recently staged a demonstration of a 5G-based self-driving car with autonomous parking capabilities.
But while consumer applications are grabbing the headlines, Sangchul thinks the greater opportunity may well be in the B2B space, where 5G applications promise to improve operations, productivity and revenue.
“5G provides new experiences, new benefits, but all this is still the tip of the iceberg. Especially as industries begin to realize that they could double or even triple their output with fewer resources, they will appreciate the advantages of this new technology,” he explained. “They will see that throughput means not just of 5G but of associated solutions such as edge computing, AI, IoT, cloud and big data. So it’s just blooming now, you know. As industries understand that this is just the beginning and something new and better, and bigger things are coming, the rate of 5G adoption will increase and within three to five years the B2B area will be much bigger than the B2C area.”
These benefits, however, require carriers to move quickly into launching 5G services.
“The telecom business is very different from the manufacturing business – once you invest, the return comes very slowly and not for the first couple of years at least. You have to understand that,” Sangchul said. “And second thing is, do it earlier than others. There are many benefits if you do it earlier. You get the first fruit or benefit of the early adopters – typically about 5-7% of the user universe,” he added.
At the same time, Sangchul sees 5G as not just a network technology but rather an entire ecosystem. “The value of 5G is even more impressive, because if you use edge computing, AI, IoT, cloud and big data all along, then I would say 5G is not a network anymore – 5G is a big system that will provide real-time value to the right people. So if you realize the value of the people, then you will have a very successful 5G system,”
Sangchul is not alone in seeing 5G as not just another, fatter data pipe. Granted, it has supported higher average revenue per user (ARPU) levels for LG U+, but there is much more to it. “Most importantly, measurements, discussions and experience from the real world show us that 5G can become much more than a productivity layer,” said Dimitris Mavrakis, senior research director at ABI Research. “The lesson providers can draw from Sangchul and LG U+ is that 5G that’s properly planned and deployed can become a platform for third parties.”
