Three Korean telecommunication experts diagnosed that in order to improve the 5G infrastructure, active investments by telecommunication companies, their efforts to discover demands, and large incentives by the government to support these activities are necessary.
On March 30, Kyung-In Kwon, the CTO of Ericsson-LG, Byong-Ho Lee, a Professor at the SNU Department of Electrical and Computer Engineering, and Nam-Gon Choi, a researcher at Yuanta Securities were interviewed in person, over video call, and over a phone call respectively. It was three years after April 2019, when Korea commercialized 5G service for the first time in the world.
-How would you evaluate Korea’s last three years of commercialized 5G service?
Kyung-In Kwon: “Korea’s 5G network is the best in the world. This can be seen from the research conducted by Open Signal, a global consulting firm. Compared to other countries, our network is at the top level, in terms of performance, coverage, and effectiveness. Problems related to coverage were raised in the early days of 5G, but it appears that even this problem has been resolved recently. Within urban areas and indoors, users find no problem with the network even if the device is set to “5G priority mode”. Efforts put in by the 3 major telecommunication companies to expand the coverage nationwide through establishing rural area joint networks are also noteworthy.
However, the 5G service that we commercialized is in a non-standalone (NSA) mode that relies heavily on the existing LTE network. Making this decision was inevitable to facilitate commercialization for the first time in the world, but it is discouraging that we are still unable to switch to the SA mode, which could be called be referred to as “pure 5G”. Korea demonstrated 5G in the 28GHz band during the 2018 Pyeongchang Olympics. This is the frequency that Korea, the “country leading in 5G technology”, valued. However, the nationwide network is currently being built with the 3.5GHz band. This, too, is disappointing.”
Shim Byong-Ho: “It can be easily acknowledged that Korea commercialized 5G for the first time in the world, and the service has stabilized to some extent. The download speed of the 5G service is faster than that of the LTE service by 2~3 times. However, many base stations are required to be constructed to maintain coverage and service quality, which is an action that telecommunication companies are hesitant to carry out due to business and cost issues. This led to the customers complaining about the quality of the 5G service. I think a larger investment in the 5G network and the expansion of the network’s coverage through this additional investment is required.”
Nam-Gon Choi: “We built a nationwide network, and was the first county to do so. Furthermore, about half the total number of subscribers to telecommunication companies are using 5G, so the 5G service could be considered successful in terms of supply. The disappointing part of the service is the ecosystem. There seems to be a lack of differentiating features from the LTE service. During the early days of 5G service, it was expected that many companies would be using 5G, but the actual demand now seems to be little. The fundamental problem is that telecommunication companies have invested in the 28GHz band, which can be used for B2B services. Of course, the reason for the telecommunication companies not investing in that frequency band exists. It is the lack of an ecosystem.”
Community groups such as the consumer citizens’ group and the people’s group for participatory democracy held a press conference titled “2 years of 5G commercialization, urging compensation for poor connection and service improvements” last year. /Yonhap News
-Why are consumers dissatisfied with the 5G service, which is highly evaluated globally?
Kyung-In Kwon: “It can be said that Korea has high expectations for the quality of communication services. When the LTE service was first commercialized, the quality was relatively good, but Korea’s customer satisfaction was very low. There are also misunderstandings. The speed of 20 Gbps that consumers expect is possible only when all technologies required for a fully-fledged 5G network establishment are implemented (telecommunication companies advertised the 5G network as having a transmission rate of 20Gbps). Furthermore, the commercialized 5G service is in NSA mode that relies on the LTE service. If the 5G signal is strong, the user’s device will utilize the 5G network, and if the LTE signal is strong, the device will utilize the LTE network. It is a misconception that the device is not utilizing 5G just because the device indicates a connection to the LTE network. The fact that devices’ battery wears out more quickly when they are set to the 5G priority mode also causes inconvenience to the consumers.”
-The number of 5G base stations is only 20% of the number of LTE base stations. It raises the question of whether the companies are showing an overly passive attitude.
Nam-Gon Choi: “From the capitalist perspective, it is natural for the companies to be passive in their investments in the 5G network. Since previous times, Korean telecommunication companies have had a strong public nature, which has been a major complaint among foreign investors. In 2019, when 5G was first commercialized, only Korean and Chinese telecom stocks declined. This atmosphere of devaluation continued until 2020, and from 2021, with reduced investments by the telecommunication companies, foreign investors returned, and stocks began to soar.
Ever since CEO Hyun-Mo Koo, KT has started its shareholder-centric management, and such management became explicit in SK Telecom after they acquired Hynix Semiconductors (now SK Hynix). Even LG U+, which pursued a growth strategy of being a pure telecommunications company in the past, is seeing growth in the non-telecommunications sector starting with CEO Hyun-Sik Hwang. The common denominator among the 3 companies is that they have been heading toward increasing the dividend payout since last year. This is what the more shareholder-friendly telecommunication companies, such as the ones in the US, Japan, and Taiwan, showed in the past when LTE was being introduced. During the introduction of LTE services, LG U+ was the catfish of the market, and the competition between the 3 telecommunications companies was fierce. In contrast, the companies see that the actual benefits arising from the competition are not large enough to pour in trillions of won, and now the companies are exhibiting a passive investment stance since the beginning of the commercialization of the 5G network. In the current situation where the buzzword in the capital market is “enhancing corporate value” and businessmen are evaluated based on stock prices, it is difficult for telecom companies to voluntarily reverse this atmosphere. Unless there is evidence of 5G being much superior to LTE from the customers’ standpoint, it will be difficult for the companies to make more aggressive investments.
Kyung-In Kwon: “One 5G base station carries out the workload done by 4~5 LTE base stations. It is difficult to compare simply with the number of base stations. It can be said that a considerable number of base stations for the 3.5 GHz band have been installed. Because of the dense coverage, there is no problem with the transition to the SA mode. From what I understand, KT has been operating with the SA mode since July of last year, and SK and LG U+ are preparing internally. The progress is considerably slow. Around the world, 20 telecom operators have already commercialized SA. The reason for this lag is probably because of the lack of demand for SA and the lack of necessity for the network to be operated on the SA mode, rather than the problem of coverage.”
-In addition to 3.5GHz, which has been commercialized, the 28GHz band was also showcased. However, there seem to be technological obstacles regarding the network using the 28GHz band.
Byung-Ho Shim: “28GHz has a higher loss rate over the path compared to 3.5GHz, and it is a frequency with strong linearity (property of propagating in a straight line like a laser with little spread). Strong linearity means that the frequency is not suitable for transmissions over moving receivers, such as people or cars. If a car is moving at 100km/h, the waves must be continuously following the car to maintain the communication connection. Rather than implementing a 28GHz connection directly to moving receivers, a design that has a 28GHz connection until the upper network/base station and a 3.5GHz connection between the base station to the moving receiver could be considered. The concept is to move quickly to towns over highways, and move normally once one has reached the town. In this way, the overall network speed can be improved while overcoming the disadvantages of 28GHz. Of course, for such design to be implemented, there must be a demand for such high-speed connections in the first place.”
Kyung-In Kwon: “It has been known since the start that 28GHz has properties of having a short reach and strong linearity. Nevertheless, experts said that commercialization will be possible and assigned the frequency for communication. At the end of January of this year, the number of wireless devices that Ericsson released in the ultra-high frequency band (mmWave, millimeter waves), including 28GHz, exceeded 100,000 units. This means that the frequency band is already past the experimental stage, and the establishment of an ecosystem that can support commercialization has begun. More than 80% of smartphones released in the US support mmWave. Korea is now at a stage where the implementation of such technology is gradually starting to be worth the cost. Millimeter waves support an ultra-low latency connection, and the upload speed is incredibly fast. In industrial environments, such connections may be needed since a high-quality video from sites has to be analyzed centrally in the headquarters. Since the technology is already prepared, it is important to discover demands in the industry.”
CJ logistics’ logistical center and a virtual logistical center created using the digital twin technology. /CJ Logistics
-Could the metaverse or AR glasses ,which many companies are jumping into, become the “killer content (application)” of the expansion of 5G networks?
Kyung-In Kwon: “Since the era of mobile communications changes every 10 years, discussions on the 2030 (2028 for Korea) 6th generation mobile communication (6G) are taking place around the globe. During such discussions, companies and countries form their visions, and without fail, the concept of a “digital twin” is emerging. The concept is not much different from the metaverse concept, but it is about digitalizing the physical world. Through the technology, we will be able to simulate the physical world to improve the real physical world. AR glasses and mixed reality (XR), which are currently being discussed, would lay the foundations for such technology. Since all industries are moving in this direction, it is a matter of time before a killer application inevitably emerges.”
“When we created the 5G vision, the most important thing was to facilitate communication that was only used by the people for industrial use. It was expected that such usage would increase productivity worldwide. The progress is slow, but I believe that this is the path forward. From the perspective of the consumers, the average revenue per user (ARPU) during the introduction of LTE networks was about 30,000 Wons, but this value did not change during the introduction of 5G networks. The reason is that now people can watch YouTube content as much as they want at a higher speed with unrestricted data usage for the same money. I think this would be considered a realistic killer application.”
Nam-Gon Choi: “In the case of VR, a lot of data is required, and having an ultra-low latency is important, but there is a limit to the usage of external devices. Such technologies are likely to be used at homes, but here they can already be utilized with the current network. It will be difficult for the technology to be the killer application. During the LTE era, iPhones were released, disrupting the application ecosystem, and exerting devastating influence, but in this era, it will be difficult to create such incredible compatibility between 5G networks and smartphones. Whether a technology is for business use or for a completely different device, imagination is required. This is a problem that Samsung, Apple, and Tesla have to solve, not the telecom companies. When a new world emerges, the telecom companies will invest appropriately on their own.”
Byong-Ho Shim: “To accelerate the expansion of the 5G network, realistically, we have to construct smart factories. Even if the goal is not 5G expansion, and such construction can solve the problem of the shortage of domestic labor, and the decline of Vietnam-based companies due to increasing wages. It is also worthy of mention that smart factory technologies can be exported overseas.”
-It has been 4 years since 5G was introduced. Do you have any last suggestions for the development of the network service?
Byong-Ho Shim: “Speaking from the industrial perspective, the slow development of the 5G network is an ecosystem issue rather than a responsibility of any particular body. There needs to be a place for the network to be used for the telecom companies to actively invest in expanding the number of base stations. If no company is willing to use 5G even if the network were to be installed, base stations cannot be recklessly installed. It is not a problem that can be solved by the government forcing telecom companies to construct the network. It is necessary to create an ecosystem to create the necessity to expand the network through an autonomous decision by the telecom companies. The government is also making efforts such as constructing specialized networks (e-Um 5G), but they have to be more active in the promotion of public-private cooperation. Of course, it goes without saying that the 3 telecom companies should continue in their efforts to make sure the consumers can feel the improvement in the service quality.”
Nam-Gon Choi: “The government made huge profits through the 5G frequency auction. Instead of pushing the telecom companies to invest, they have to support them with incentives. If coverage is an issue in some locations, it is possible to consider a policy that would enable a 3rd party to install a base station in the area, which would be leased to the three companies. This way, the companies can experience reduced costs while expanding the coverage. Developing a killer application could also contribute to the development by providing additional funds.”
Kyung-In Kwon: “In order to implement an ultra-low latency network, which is a feature of the 5G network, we need to quickly transition into the SA mode. Of course, some may question how the transition would be possible when the number of base stations is not sufficient. If coverage is the issue, the case of T-Mobile of the United States can be referenced. T-Mobile merged with Sprint, which was the only carrier with a mid-band frequency of 2.5GHz, and when 5G began to be commercialized, they secured the low-band frequency (600MHz) and began providing the service. Now, T-Mobile’s 5G network is highly evaluated for providing stable 5G service by expanding coverage even to the mid-band frequencies. Similarly, we can convert the low bandwidth used by the LTE network to be used by the 5G network through the DSS (Dynamic Spectrum Sharing) technology. If the government approves the technology, carriers will try to use it to expand coverage. With the coverage issue solved, the companies will be more incentivized to move on to the SA mode. It is a time for the government and businesses to devise a strategy that evenly utilizes the low, medium, and high bandwidths.”
Translated by: Do-Hyung Kim, English Editor of the Department of Electrical and Computer Engineering, email@example.com