Breaking through 30 million 5th generation (5G) mobile communication subscribers has become virtually difficult. It is interpreted that the Long Term Evolution (LTE) service still maintains competitiveness centered on budget phones, and the 5G subscription strategy using premium terminals did not work. In the new year, mobile carriers need a new differentiation strategy.
According to the Ministry of Science and ICT on the 27th, the number of 5G subscribers was 26,229,565 in September.
Considering that the monthly average of 580,000 people increased from 21,566,928 in January 2022 to September, about 27 million people will be achieved by December, but the achievement of 30 million people expected by the Ministry of Science and ICT and telecommunications companies at the beginning of the year is unclear.
In the case of LTE, considering that the number of subscribers exceeded 30 million in two years and eight months after its commercialization in July 2011, the rate of increase in 5G is expected to be slow by about four to six months.
Mobile carriers have diversified their services by launching a mid-rate plan for 5G between 24 and 31 GB. However, it is evaluated that it has been difficult to dramatically spread the base as the market has entered a mature stage. Above all, it is an observation that the influence of premium terminals will continue to decline as an incentive to subscribe to mobile services. The type of subscription to purchase premium terminals such as the Galaxy Z·S series and the iPhone 14 in a self-sufficient way centered on the MZ generation and to save on fees is increasing.
In fact, the total number of LTE subscribers in September recorded 47,120,033, a decrease of 890,000 compared to January this year. The number of LTE budget phone subscribers increased from 9,199,669 in January to 11,034,462 in September.
The sales strategy of injecting subsidies into premium terminals to induce users to subscribe to high-price plans is still operating in the market, but it is evaluated that it is not the same as before.
Above all, telecommunications companies are not engaging in fierce competition to attract subscribers as in the past, to the extent that they have never received a penalty for illegal subsidies from the Korea Communications Commission this year. The central axis of competition is shifting to new businesses such as artificial intelligence (AI) content and media.
Nevertheless, the 5G market is expected to grow steadily. Efforts are being made to secure killer services only for 5G, such as the metaverse. It is expected that affordable phones will also launch 5G services in the new year, centering on large companies, and strengthen marketing activities to increase subscribers. If a killer service comes out in the business (B2B) field, explosive growth comparable to that of the general user market is possible. Mobile operators are also continuing efforts to improve speed and quality by securing additional 5G frequencies.
An official from a mobile telecommunications company predicted, “Continuous growth in the 5G market will be achieved through competition focused on services in the new year.”
Key indicators related to 5G (Source: Ministry of Science and ICT)
Reporter Park Ji-seong [email protected]