#Key Business Issue l 2019-04-15
South Korea has become the first country in the world to start fifth-generation or 5G commercial services. The country also announced a national strategy aimed at building the world’s best 5G infrastructure. This latest development is widely believed to have paved the way for Korea to become a leader in the Fourth Industrial Revolution.
Today, we’ll discuss potential changes and tasks in the new era of the high-speed network and super-fast connectivity with Professor Park Hee-joon from the Department of Information and Industrial Engineering at Yonsei University.
Korea launched the world’s first commercial 5G mobile network at 11 p.m. on April 3, local time. The 4G long term evolution or LTE is now coming to an end and Korea is ready to usher in a new era of 5G telecommunications.
The concept of 5G network communication was first introduced by the International Telecommunication Union in 2015, when it said it would decide a set of 5G standards in 2020. Since then, telecom companies in various countries have competed to take the initiative in the 5G market.
Korea played a leading role in developing global 5G standards until the end of 2017. A local mobile carrier offered various 5G trial services during the PyeongChang Winter Olympics in February last year. Korea held a frequency auction for 5G networks in June 2018 and began to provide commercial 5G services to corporate customers in the manufacturing sector on December 1 of the same year. Starting on April 3, the services were made available to the general public.
Shortly after Korea started commercial 5G smartphone services for individual subscribers on April 3, U.S. carrier Verizon introduced its own commercial 5G services. Korea winning the title as the world’s first 5G network is not without controversy. In fact, the country was initially planning to fully commercialize 5G services starting on March 28, but had to put off the date due to a delay in the launch of 5G smartphones and other problems.
Korea created the “5G Forum” in 2013 to better prepare for commercial 5G services. The nation has since been able to develop relevant technology and services, providing the world’s first 5G pilot services at the 2018 PyeongChang Winter Games. Korea has now turned on its 5G networks, opening the era of super-connections.
In the 4G mobile network, new phones were released, while relevant services were introduced later. In the 5G network, on the other hand, the industry discusses services tailored to the super-fast network first and then develops smartphones capable of offering such services.
The 5G services will spur the development of key industries in the Fourth Industrial Revolution, including autonomous vehicles, smart factories and cities. Self-driving cars, in particular, could be introduced in three to four years. The next-generation network enabling large amounts of data to be transferred at fast speeds with minimal latency will allow telecom firms to provide their subscribers with enhanced experiences such as augmented and virtual reality in the near future.
Compared to 4G, 5G technology will enable networks to handle 100 times more data and up to 20 times faster speeds with one-hundredth the latency. People can easily access data-heavy content using virtual and augmented reality technologies, while self-driving vehicles as well as new services using artificial intelligence and advanced fin-tech will be readily available. In the manufacturing sector, smart factories running on 5G networks will be able to increase productivity and efficiency. In the field of healthcare, real-time remote patient monitoring will allow people to manage their health anytime, anywhere.
The ripple effects of 5G technology on various industries will be enormous. A global market researcher predicts that the new 5G network will generate 12.3 trillion US dollars worth of global economic effects by 2035.
Korea wishes to secure a share of this new, lucrative market, but the nation faces criticism that it lags behind its rivals in 5G preparation and application plans.
According to a recent report by the Cellular Telecommunications Industry Association in the U.S., South Korea ranked first in 5G readiness and competitiveness last year but trailed China and the U.S. this year. The report pointed out that Korea falls behind its competitors in 5G-enabled self-driving cars, robots and drones.
I think Korea was too focused on swift 5G commercialization and was rather unprepared for its industrial applications. In comparison, the U.S. and China have developed 5G as the key platform for the Fourth Industrial Revolution so it can be applied to artificial intelligence, virtual reality, autonomous vehicles, healthcare and the aerospace industry. In particular, Korea makes up an insignificant portion in the 5G equipment sector, lagging far behind China.
While Korea was the first to launch the 5G mobile network, its actual plan to use the network leaves much to be desired. The title of the “world’s first” may end up being “all flash and no substance.”
5G is expected to bring about dramatic changes to people’s everyday lives and the industrial sector. While Korea has a competitive edge in smartphones, semiconductors and telecommunications, it is behind the U.S. and Japan in core content, and behind Europe and China in network equipment. China’s Huawei and Finland’s Nokia have more essential 5G standard patents than Samsung Electronics. Korea also has to solve issues including insufficient base stations and delays in data transfers.
As part of efforts to enhance Korea’s standing in the 5G industry, the government has unveiled a national strategy to nurture 5G and related industries.
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In a ceremony on April 8, attended by President Moon Jae-in, the government announced its “5G Plus Strategic Business” plan. Under the plan, Korea will develop five key services and 10 emerging industrial sectors with a goal of securing 15 percent of the global 5G market, creating 600-thousand jobs, reaching 73 billion US dollars in exports and generating a 160 billion dollar market by the year 2026.
To stimulate private investment, the government will provide tax breaks to telecom companies that invest in the establishment of 5G nationwide until next year. It will use smart cities as test beds for new 5G services, overhaul 5G pricing plans and double the number of 5G frequencies by 2026. In addition, the government will facilitate collaboration between large companies and startups and support their moves to explore overseas markets. These are part of the government’s comprehensive plans to make the nation a frontrunner in 5G networks.
Under the new plan, the government and the private sector will spend 27 billion US dollars in establishing a nationwide 5G network by 2022. The five key services Professor Park mentioned include smart factories and self-driving vehicles, while the 10 new industries the government promised to foster include next-generation smartphones, robots and drones. All these measures are aimed at promoting innovative growth and developing the nation as a global leader in the 5G network. However, the ambitious plan requires a lot of effort.
It is definitely worth mentioning that Korea has made strenuous efforts to secure the title of the world’s first commercial 5G network. The world’s “first” represents the nation’s confidence in technology and hopefully should lead to the title of the world’s “best.” While the country may be tempted to grab the title right now, providing quality services and gaining recognition from customers will be far more important.
During the initial stages, various problems may arise. Moreover, many regulations still hinder the development of industries using new technologies such as remote medical services and self-driving cars. The government needs to ease or remove those regulations standing in the way of fostering new businesses in order to create and promote 5G markets and thereby boost the economy.
As the first country to activate 5G, Korea has once again demonstrated its status as an information technology powerhouse, but the real competition starts now. The nation should bear in mind that the “best” title will be more important than being the “first.”