A World in Standard War... Leading Positions in Next-Generation Technologies by Korean Telecoms and Others [Tech War, Birth of Advanced Nations]

30% of Smartphone Price is Patent Royalty
South Korea Ranks 3rd Globally in Declared Standard Patents

First Commercialized 5G Secures Technological Superiority
Growing Influence in International Standard Setting Process
Ranked 2nd in ITU-T General Assembly Chairmanship

Domestic Companies Samsung, LG, SKT, KT Strive to Lead 6G and Quantum Technology Markets

[Asia Economy Reporter Lim Hye-seon] ‘Standards’ have become a core element of national competitiveness that drives industrial economy and corporate growth. Countries around the world are engaged in a silent ‘standards war’ to seize leadership in next-generation industries. ‘Standards’ are unified and simplified regulations based on the consensus of stakeholders regarding product concepts, methods, and procedures. Various standards exist close to everyday life, such as wireless communication, computers, cellphone chargers, Wi-Fi communication, and document formats.

Leading Technology Creates Markets

American telecommunications equipment company Qualcomm standardized the Code Division Multiple Access (CDMA) technology as an international standard during the introduction of 2G mobile communication and incorporated it as a standard patent. Qualcomm earns annual licensing revenue of 10 trillion won based on its standard patents. Currently, all cellphone manufacturers pay Qualcomm 2.5% to 5% of the wholesale price for its standard patents. Standard patents are patents that include standardized technologies established by standardization organizations.

South Korea claimed the title of ‘world’s first commercialization of 5G’ on April 3, 2019. Samsung Electronics, which participated in 5G international standardization work through preliminary research since 2012, played a decisive role in South Korea’s world-first 5G commercialization. At the time, when South Korea was a telecommunications underdeveloped country, Samsung Electronics focused on technology development amid neglect and distrust and persistently knocked on the doors of international organizations and governments worldwide. As a result, Samsung Electronics secured the second-largest number of 5G standard patents globally and exports equipment worth trillions of won to leading global companies.

Leading technology countries increase their market dominance by establishing new standards through standardization work based on accumulated experience, while follower countries not only pay royalties for standard patents but also fall behind in the competition for technological leadership. One study estimates that the royalty for standard patents included in a $400 smartphone accounts for more than 30% of the smartphone’s price.

Is South Korea a Technology Leader?

According to the Korean Intellectual Property Office, as of the end of last year, South Korea ranked third in the world with 20,616 declared standard patents registered with the world’s five major standardization organizations, accounting for 17.2% of the total. This is one rank higher than in 2016. The world’s five major standardization organizations are the International Organization for Standardization (ISO), International Electrotechnical Commission (IEC), International Telecommunication Union (ITU), Institute of Electrical and Electronics Engineers (IEEE), and European Telecommunications Standards Institute (ETSI). By company, Samsung Electronics and LG Electronics recorded 10,078 and 8,140 standard patents respectively, ranking 4th and 5th. The top three are Qualcomm, Nokia, and Huawei.

South Korea’s voice is also growing in the international standard-setting process. Entering important positions that decide standards is proof that the world recognizes our technological capabilities. Having our personnel in key positions is advantageous when reflecting domestic companies’ opinions in standardization decisions. According to statistics from the National Institute of Technology and Standards, the cumulative number of South Korea’s international standard proposals reached 1,153 by the end of last year, an increase of 80 from the previous year. The number of chairs, secretaries, and conveners of technical committees (TC) and subcommittees (SC), which play important roles in the international standard-setting process, is also increasing annually. Last year, 243 people held executive positions, six more than the previous year.

Growing into the World’s Second Largest Chair Group in Next-Generation Communications

Notably, South Korea has achieved remarkable results in the mobile communications sector. At the ITU-T plenary meeting held last March, South Korea secured a record 10 chair positions, elevating it to the world’s second-largest chair group holder (18 out of 288 seats). ITU-T is a body under the United Nations (UN) specialized in ICT standardization that develops telecommunication standards. Ko Sang-won, head of the International Cooperation Research Division at the Korea Information Society Development Institute, was elected vice-chair of the OECD’s Artificial Intelligence Governance Working Party (WPAIGO). Kim Hyung-jun, director of the Korea Electronics and Telecommunications Research Institute, was elected chair of ITU’s Internet of Things (IoT) and Smart City international standardization group (ITU-T SG20). Professor Yeom Heung-yeol of Soonchunhyang University holds the chair of the Information Security Study Group (ITU-T SG17). For the first time in history, South Korea is also challenging the ITU Deputy Secretary-General position. Current ITU Secretariat Lee Jae-seop has declared his candidacy for the Deputy Secretary-General position in the high-level election to be held at the ITU plenipotentiary conference this September.

Through continuous technology development and participation in standardization work, South Korea succeeded in the world’s first commercialization of 5G and gained an advantage in the 5G standard competition. South Korea ranks second in the world in 5G standard patent share (25.42%), following China.

SKT and KT Lead Quantum Technology

Countries and companies worldwide have entered a competition to dominate the quantum technology and 6G markets, regarded as game changers for future industrial competitiveness. South Korea is pouring all efforts into quantum technology development. Quantum technology is next-generation information technology that utilizes the physical properties of quantum?the smallest unit of energy?such as quantum superposition, quantum entanglement, and uncertainty, enabling ultra-high-speed, large-capacity computation and cryptographic communication. It is subdivided into quantum computing, quantum communication, and quantum sensors. The government has set a goal to become one of the four major quantum technology powers by 2030 and is collaborating with companies.

First, Park Sung-soo, head of the Korea Electronics and Telecommunications Research Institute (ETRI), was appointed chair of the IEC ‘Quantum Technology Standardization Evaluation Group (SEG),’ securing South Korea’s position to lead new quantum technology standardization tasks. SEG is a special organization within the IEC that promotes new standardization tasks not handled by existing standardization committees. Domestic telecom companies such as SK Telecom and KT are also making every effort to secure technology. There are 31 quantum cryptographic communication network-related technologies either standardized or under research and evaluation by ITU-T. Among them, 35% of the standardization is led by KT. KT has developed 11 quantum cryptographic communication network-related standards, the most among ITU’s approximately 900 member companies. Recently, a hybrid key exchange method using quantum technology (QKD) proposed by SK Telecom in the ITU-T Information Security Study Group (SG17) was also adopted as an international standard.

Samsung Aims to Be ‘World’s First’ in 6G as Well

6G is next-generation communication technology with data transmission speeds up to five times faster than 5G. Once commercialized, 6G can achieve transmission speeds exceeding 100 gigabytes per second. The government aims to succeed in the world’s first 6G technology demonstration by 2026. To this end, it plans to invest 200 billion won in related technology development by 2025. Companies such as Samsung and LG are also preparing for the 6G era.

Samsung Electronics established the Next-Generation Communications Research Center under Samsung Research in May 2019 and began researching 6G preliminary technologies. In May, it held the first Samsung 6G Forum and disclosed related technological achievements. LG was also selected as the chair company of the Next G Alliance, organized by the Alliance for Telecommunications Industry Solutions (ATIS) in the United States, last June.