Korea Consumer Federation 5G User Survey... "84% Joined to Buy Latest Phone"
"Only 5.9% Want to Use 5G Service"
Top 3 Telecoms See Smooth 5G Subscriptions... Consumers Dissatisfied with Quality and Price
[Asia Economy Reporter Eunmo Koo] As the number of domestic 5G service subscribers surpassed 20 million at the end of last year, it has been revealed that half of the subscribers do not find 5G services very attractive and joined mainly to purchase the latest smartphones.
Half of 5G Subscribers "Joined to Buy the Latest Phone"
On the 21st, the Korea Consumer Federation surveyed 1,000 5G users about their usage status, and 56.1% of service subscribers responded that they joined 5G services because the latest smartphones were released exclusively for 5G. Those who said they joined because they wanted to use a 5G device accounted for 15.1%, and 13% of users stated they joined because higher official subsidies and support funds were offered when subscribing to 5G. Only 5.9% said they wanted to use 5G services and plans, indicating that 84.2% of all respondents joined 5G services mainly to buy the latest smartphones.
Although the three major telecom companies are sailing smoothly with rising sales and operating profits as 5G subscribers increase, consumers themselves do not find 5G services particularly attractive. This trend has intensified recently as phone manufacturers release not only flagship products but also mid-range and budget models supporting 5G.
Namgon Choi, a researcher at Yuanta Securities, said, "It is difficult to give high marks to the increased 5G penetration rate thanks to most latest devices being released as 5G-supported models. The 5G-exclusive cloud services mentioned in the early days of service introduction, such as cloud gaming, have not become popular, and the reality is that the services have not gone beyond the limitations of those that can be comfortably used on 4G."
Samsung Electronics 'Galaxy Z Flip3'. Samsung Electronics launched the 3rd generation foldable smartphones, the 'Galaxy Z Flip3' and 'Galaxy Z Fold3', as 5G-supported models in August last year. Apple has been releasing 5G-only models, not LTE, starting with the 'iPhone 12' series in 2020 and continuing with the 'iPhone 13' series last year.
"Expensive and Unstable" Controversy Continues
According to the Ministry of Science and ICT, the number of 5G subscribers reached 20.19 million as of the end of November last year, surpassing 20 million in just 2 years and 7 months since commercialization in April 2019. Compared to November 2020 (10.93 million), the number nearly doubled in one year. One-third of all mobile communication service subscribers are using 5G services.
The growth rate of domestic 5G subscribers, which slowed from over 1 million per month to 600,000 per month early last year, rebounded to 700,000 per month by the end of August following the release of the Galaxy Z Flip3 and Galaxy Z Fold3, and increased to 980,000 after Apple’s iPhone 13 series launch in October. The subscriber increase continued with 800,000 new subscribers in November, pushing the total beyond 20 million. The rise in 5G subscribers is clearly benefiting from the release of the latest 5G devices.
Although the number of subscribers has increased, issues with quality and price remain. According to the Ministry of Science and ICT’s 'Second Half 5G Quality Evaluation' conducted on the 30th of last month, which checked 5G coverage and speed of the three telecom companies, the average 5G download speed was 801.48 Mbps (megabits per second), about 1% slower than the first half of the year (808.45 Mbps). The 5G upload speed also slightly decreased to an average of 83.01 Mbps from the previous 83.93 Mbps.
Expensive plans are also a source of dissatisfaction. As of the end of November last year, the average monthly fee for 5G plans was 73,064 KRW. The average data usage by consumers was only 31.1 GB, about half of the average provided 60.9 GB, indicating that users are not fully utilizing the services offered by their plans. Ji-yeon Jung, Secretary General of the Korea Consumer Federation, said, "Since two out of three current 5G users have expressed willingness to switch to LTE, it is essential to introduce mid- to low-priced plans reflecting actual data usage and to improve quality."
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