Reporter's Notebook Telecom companies' future growth in 5G lies in B2B market
LG Electronics' smart factory learning center in Pyeongtaek, Gyeonggi Province / Courtesy of LG Electronics
By Kim Hyun-bin
KT, SKT and LG Uplus jointly won the title of becoming the first to commercialize the fifth-generation (5G) network in April 2020. Since then, the speed of 5G has not lived up to its title. On paper, 5G is supposed to be 20 times faster than the previous Long Term Evolution (LTE) network. But in reality, 5G has only been 4.5 times faster at best. As a result, frustrated consumers have been filing scores of complaints about the quality of the network. But will a 20-times faster speed truly benefit the average person?
In reality, the only true benefit a consumer might enjoy is the capability to better stream higher-quality videos in real time, which will allow streaming of virtual reality (VR), artificial intelligence (AR) and 360 surround videos seamlessly. But these services are already used without too much hassle by many through the current 5G speeds.
The true strengths of the 5G network come into play in the business-to-business (B2B) sector. Many futuristic movies depict the arrest of bad guys using touchscreens that enable good guys to track them in real time, which would require a high-speed 5G network or even the sixth-generation (6G) network that is currently under development by IT firms. Currently, smart factories are in need of a fast 5G network connecting internet of things (IoT) devices that help robots to develop and store goods.
For 5G to better suit the B2B sector and gain competitiveness, investments are needed in the 28 gigahertz (GHz) frequency infrastructure. The network is vastly different from the consumer 5G network which uses a 3.5GHz frequency. The 28GHz infrastructure could create a hotspot the B2B sector could utilize that is much faster than the consumer frequency. Samsung Electronics in cooperation with U.S. Verizon has finished development of a 28GHz technology.
The 28GHz technology does not come cheap and requires trillions of won in investments to establish networks, which only comes as a burden for local telecommunication firms that are only starting to make profits from the consumer 5G network. However, the companies know they need to start focusing on the B2B sector to find new growth opportunities apart from the already saturated consumer market.
The government needs to reduce the financial burden on telecom companies with subsidies, including tax credits, and to take a long-term approach as the network will provide local businesses the opportunity to fully utilize Fourth Industrial Revolution technologies in their factories that will increase production and revenue, which, in turn, would give more opportunities to give back part of their profits to the local community and by paying higher taxes.