Was 5G, which was said to be 20 times faster than LTE , a fraud? The reality is only 5.9 times
the communication cost per household in the first half of this year, 121,611 won…
5G subscribers are angry at the increase of 7.1% after 5G commercialization. The three telecommunications companies
claim there is no demand and return 28 GHz despite annual operating profit of KRW 4 trillion
. Is Korea a network powerhouse? 5G (
5th generation mobile communication), which was said to be ’20 times faster than LTE (4th generation mobile communication) ‘ , was pushed down to 6th place in the ‘ 5G Readiness Index’ and was effectively reduced to a half-baked service. This is because the three telecommunication companies, which are generating an annual operating profit of more than 4 trillion won, returned the 28GHz frequency because it was not commercially viable. Consumers are angry at the reality of having to pay more expensive rates than LTE while using services that fall far short of the speed originally promised by the three telecommunication companies . The government explains that the telecommunications industry, dominated by the three telecommunications companies, has become an oligopoly structure since 2002, and the market is not functioning properly. We diagnose the telecommunications industry, which is in a state of ‘market failure’ where resources are not efficiently allocated based on price. [Editor’s note]
April 8, 2019 at K- Art Hall, Olympic Park, Oryun-dong, Songpa-gu, Seoul. Former President Moon Jae-in said at the ‘World’s first 5G commercialization in Korea’ event that day, “We will build a national 5G network as early as 2022.” The congratulatory performance expressed ultra-high speed, ultra-low latency, and ultra-connectivity technologies. The dance team on stage at K- Art Hall performed a ‘triangular remote collaboration’ by collaborating with the Busan and Gwangju performance teams on the large screen behind the stage. Thanks to 5G-based ultra-high-definition real-time broadcasting technology, productions that transcend time and space were possible.
At that time, Korea was in a truly festive mood. This is because on April 3, 2019, the country opened the 5G era first, beating the United States, Japan, and China. In response to the news that Verizon, the largest telecommunications company in North America, was aiming for the ‘world’s first commercialization of 5G,’ the country succeeded in winning the title of ‘the world’s first country to commercialize 5G’ by just two hours, two days ahead of schedule.
However, four years later, consumers are feeling disappointed and angry about 5G service, which is only 5.9 times faster than LTE . According to the ‘communication service quality evaluation’ conducted by the Ministry of Science and ICT at the end of last year, the domestic 5G download transmission speed was 896.1 megabits ( Mbps) .) level. This is a communication speed that cannot even be dreamed of for autonomous driving, where ultra-high-speed real-time communication is essential. Former President Moon referred to 5G as ‘remote territory’ during official appearances during his time as a presidential candidate in 2017 and immediately after his inauguration. As if his words were foreshadowed, netizens are ridiculing him as ‘5G in remote areas’.
In April 2019, when the three telecommunications companies launched 5G services, they launched a massive campaign, emphasizing speed. But the promises they made to customers were not kept. Instead, they charged customers with more expensive 5G rates than LTE and prevented them from signing up for the LTE plan when activating a new 5G cell phone. This is because they were encouraged to switch to a 5G plan that is more profitable for them. This is why civic groups and the legal community are criticizing it as a ‘predatory fee’.
The three telecommunication companies recorded an operating profit of 4 trillion won for two consecutive years thanks to the expansion of the number of 5G subscribers, and are having a performance feast this year as well. The lowest rate for LTE starts from the 30,000 won range, and for 5G, it starts from the 40,000 won range. Even in an era of high inflation, household communication costs are increasing due to the commercialization of 5G. As of the first half of this year, the average monthly communication cost expenditure per domestic household (one-person household or more) announced by the National Statistical Office is 126,111 won. Compared to the first half of 2019, when the three telecommunications companies succeeded in commercializing 5G, it increased by 7.1%.Angry 5G subscribers claim “deceiving consumers and attracting subscribers”…
‘Market failure’ due to monopoly structure of three companies
Angry 5G subscribers
filed a class action lawsuit against the three telecommunications companies in June 2021 at the Seoul Central District Court, demanding compensation for damages, saying, “Please return the difference between 5G and LTE rates.
” Up to 1,000 subscribers have participated in the lawsuit so far.
Attorney Kim Jin-wook of Joowon Law Firm, who is in charge of the lawsuit, said, “The three telecommunication companies
deceived consumers and attracted subscribers even though they knew that they would not be able to achieve speeds 20 times faster than LTE, and received high predatory rates based on this premise.” He added, “They did not notify consumers
. “Unlike this, providing a service that cannot be considered real 5G is a clear illegal act and fraud in which the business operator defaulted on its obligations,” he argued.
The Fair Trade Commission also imposed a total fine of 33.6 billion won on the three telecommunications companies in May of this year, saying, “The three telecommunications companies falsely exaggerated and deceptively advertised
5G services as ‘20 times faster than
LTE .’” The three telecommunications companies are fighting back with the excuse that it is “theoretically the highest speed.”
Oh Se-hyeong, head of the economic policy department at the Citizens’ Coalition for Economic Justice, said, “The 5G services of the three telecommunication companies are not trusted to the extent that they are evaluated as ‘5G only in appearance’ or ‘actually a fraud.’” He added, “The three telecommunication companies are not willing to provide proper 5G services.” “There is no such thing, and this can be seen as a ‘market failure’ caused by the monopoly structure of the three companies.”
He added, “It is disappointing that the government has also acted as a driving force and made policy efforts to provide proper 5G services, and is only focused on what is visible (the world’s first 5G commercialization).”
Due to lack of proper investment, we only ranked 6th in the ‘5G Readiness Index’.
So why do we use disappointing 5G services today?
The frequency bands of 5G are largely divided into 28 GHz and 3.5 GHz.
Speeds 20 times faster than
LTE can be achieved at the 28GHz frequency. As of 2018, the three telecommunications companies were working hard to secure the 28 GHz frequency, paying 622.3 billion won in price for the frequency.
However, the three telecommunications companies later changed their attitude and virtually gave up on investment, saying, “28 GHz is 메이저놀이터realistically expensive to build, but there are no devices that support it and there is no demand, so there is no profit model.”
As a result, the government was able to reclaim the 28 GHz frequency, and the three telecommunications companies were relieved of the investment burden.
Korea took the title of ‘the world’s first country to commercialize 5G’, but its status as a network powerhouse is being shaken by its unfinished 5G service.
This is because when 23 countries around the world, including Italy, the United States, Japan, Australia, and India, were listed on the list of countries allocating ultra-high frequency bands over 28 GHz, their names were deleted from the list.
In the ‘5G Readiness Index’ evaluation announced by American consulting firm Kearney in June of 33 countries that have commercialized 5G, Korea recorded 6.9 points, tied for 6th place with Australia.
The United States took first place (8.4 points).
It was followed by Singapore (7.6 points), Finland (7.3 points), and Japan and Norway (7.1 points).
Kearney said, “
We focused on not only the degree of 5G commercialization, but also whether telecommunication companies were selling B2C (business-to-consumer) products and private networks that support 5G. We also looked at whether they were providing improved 5G services.
Some are criticizing that the government is responsible for failing to encourage active 5G investment by the three telecommunication companies.
In fact, the facility investment of the three telecommunications companies has remained at 8.2 trillion won for three consecutive years since 2020.
Kim Joo-hyung, team leader of the People’s Solidarity for Participatory Democracy’s Economic and Financial Center, said, “The government only focused on being ‘the first in the world’ and did not play a role in monitoring whether the three telecommunication companies were properly implementing this. Telecommunications services are strongly public assets, but they are left entirely to the market.” “It appears that a failure has occurred,” he said.
In the U.S., ‘5G’ works well even with 100,000 people…
Korea, ‘5G’ not working for 2,000 people
The three telecommunications companies explain that there is no demand for the 28GHz frequency.
However, overseas, it is used in areas where people are concentrated (hotspots).
A representative example is SoFi Stadium located in Los Angeles (
LA ) , where the Super Bowl, the final of
the National Football League (
NFL ), is held. At a stadium that can accommodate up to 100,000 people, people take photos and videos in real time, send them, and upload them online.
Although communication usage is concentrated, there is no inconvenience to visitors using Verizon’s 5G.
This is because the download speed during the game boasts 2.5Gbps (gigabit per second).
This is about 5 to 6 times faster than the domestic 5G average download speed of 0.410 to 0.464 Gbps (based on British market research firm Open Signal).
However, the situation in Korea is the exact opposite.
On the 24th of last month, Naver
held a public event for generative artificial intelligence (
AI ) ‘Hyperclova
X’ at COEX in Gangnam-gu, Seoul. At that time, 2,000 people gathered, and not only did the wireless internet not work, but videos and photos could not be transmitted smoothly.
Hong In-ki, a professor of electronic engineering at Kyung Hee University, said, “For the sake of market development and consumers, it is desirable for 5G services to run together in the 3.5 GHz and 28 GHz frequency bands. Even though Korea won the title of the world’s first country to commercialize 5G, the three telecommunication companies are still using the 28 GHz band. “The unprecedented situation of giving up all at once could lead to alienation when talking about service technology using high-band frequencies on the world stage,” he said.