5G lessons from South Korea

Rémy Pascal / Analysys Mason
08 May 2019

In December 2018, the three mobile network operators (MNOs) in South Korea soft-launched their 5G services with mobile hotspots for selected enterprise customers. SK Telecom, KT and LGU+ expanded their offerings when the first 5G smartphones became available by launching 5G services for consumers on 3 April 2019.

These are sizeable launches already, with coverage available in parts of the Seoul metropolitan area and other major cities in the country. Moreover, local operators are planning to provide coverage for 85 of the largest cities in the country by the end of the year, which will correspond to approximately 90% population coverage.

This comment discusses the introduction of consumer 5G services in South Korea in more detail and highlights potential lessons for operators worldwide.

5G plans only available in the mid- and high-end tiers

The government in South Korea required operators to launch affordable 5G tariffs, and it approved a price of 55,000 won ($48), which set the tariff for all three operators' basic plans with 8–9GB of data (unlimited at 1Mbit/s after). This tariff is comparable with SK Telecom's and KT's existing LTE plans, which cost 50,000 won and 49,000 won per month, respectively, for 6GB of data (unlimited at 1Mbit/s after).

All other 5G tariffs offer generous data allowances (from 150GB to unlimited data) but are more expensive (75,000 won – 130,000 won ($66–114)). SK Telecom's and KT's fully unlimited 5G plans cost 89,000 won and 80,000 won per month, respectively ($78 and $70), which is less expensive than their two fully unlimited LTE plans (launched in 2018), which cost 100 000 won and 89,000 won ($88 and $78) per month, respectively. However, LGU+'s unlimited monthly LTE plan at KRW78 000 is cheaper than its 5G contract at 85,000 won ($69 compared with $75).

Discounts are available for both LTE and 5G plans, and customers typically receive a discount if they sign a 2-year contract and/or if they sign up with a family member. For example, a customer that signs a 2-year contract with KT together with a family member can benefit from unlimited 5G for a monthly tariff of only 40,000 won ($35). Plans come with different perks (including data sharing, allowances and data roaming), which means it is difficult to make an exact comparison with LTE plans.

In general, our tariff analysis shows that 5G plans are positioned at the mid and high-end of the market but priced competitively compared with LTE plans in these segments (however, more affordable LTE options are available). Speed-tiering is not a primary feature, even if different plans offer different throttling and roaming speeds.

In terms of speed, operators are claiming that their 5G service will offer gigabit speeds but are not guaranteeing any minimum or average speeds. SK Telecom said that the maximum theoretical speed on its network is 2.7Gbit/s, achieved by combining 5G NR with LTE, compared with a maximum theoretical speed of 1.2Gbit/s with LTE.

Figure 1: 5G plans available at launch, by operator, South Korea, April 2019

Source: Operator-provided information, 2019

Only one smartphone is available for now – and it is expensive

The first and only device available on launch day was the Samsung Galaxy S10 5G. The 512GB model costs 1.55 million won ($1356). Subsidies vary by operator and go up to 500,000 won ($438). LG's V50 ThinQ and Samsung's Galaxy Fold were both expected to be made available by the end of April, but release dates had not yet been confirmed at the time of writing. Only premium smartphones will be available in the near future and operators have not yet announced any plans to launch more-affordable models. The high price of 5G smartphones is an issue and to facilitate their acquisition, operators in South Korea are offering incentives such as replacement programs (for example, the device can be returned and replaced with a new device with the same brand), rental options and longer instalment plans (up to 48 months). Significantly, these solutions could be replicated in other markets worldwide.

A large amount of content and value-added services are bundled in order to attract early adopters of 5G and encourage new usage

Operators are concentrating on designing their plans by bundling content and offering value-added-services (VAS) in order to attract early adopters of 5G, promote high-end plans and drive new usage. Most of these new services and content relate to video, music, games and social applications, but also help to promote new formats, especially virtual reality (for video, games and communications).

A number of games and applications are preloaded on to 5G devices. The content is often free and the data zero-rated so that customers can discover the service. Operators hope that they will be able to monetize these services and content later by encouraging consumers to continue to use them. Operators are working in partnership with other service and content providers to encourage data usage. For example, SK Telecom has partnerships with local video streaming service Pooq and music streaming service Flo; KT partners with YouTube and cloud-gaming service Hatch; and LGU+ has joined forces with both Netflix and YouTube.

VAS bundling, zero-rating and partnerships with game and content companies existed before the introduction of 5G, and most services are already available using 4G, but not all. For example, KT's eSports Live, a dedicated app that allows users to watch a set of five screens simultaneously, is available only with 5G. Operators have also announced promotions that are only available to 5G early subscribers. For example, customers of SK Telecom's 5G Game Pack can play the same games using 4G, but they would not have access to free in-game items, zero-rated data or the enhanced user experience.


The mobile market in South Korea serves as a model for the ways that operators worldwide can position their 5G tariffs. It is too early to judge the success of these launches in South Korea. However, it is worth highlighting that the government reported that 260,000 subscribers (equivalent to 0.4% of the connections base) had signed up for 5G at the end of April 2019.

This article first appeared on Anlaysys Mason website and can be found here

Rémy Pascal is senior analyst at Analysys Mason

Image: iStock Photo

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