New Smartphones Launch One After Another... Fierce 5G Subscriber Competition Among 3 Major Telecom Companies

Galaxy Z Fold4·Z Flip4, iPhone 14 Release
3 Major Carriers Gradually Introduce 5G Mid-Tier Plans

[Asia Economy Reporter Lim Hye-seon] Competition among the three major mobile carriers to attract 5th generation (5G) subscribers is expected to intensify in the second half of this year. This is to respond to the increasing demand for 5G subscriptions, driven by the launch of premium new smartphones and the introduction of mid-tier 5G plans.

According to the telecommunications industry on the 12th, KT will launch a new plan on the 23rd offering "30GB of data for 61,000 KRW per month." KT designed this plan to be 2,000 KRW more expensive than the SK Telecom plan released earlier but provides 6GB more data per month. Although the monthly fee exceeds 60,000 KRW, the data volume is 30GB, which is higher than the average monthly usage of 5G subscribers (25-27GB). The cost per 1GB is approximately 2,033 KRW. KT will also introduce a 5G mid-tier plan next month that can be subscribed to via KT Direct without visiting a store.

SKT was the first to supplement the low data (8GB) and mid data (24GB) tiers and newly added an unlimited data tier with different additional benefits. The new SKT 5G plans are segmented into "8GB for 49,000 KRW per month," "24GB for 59,000 KRW per month," and "unlimited data for 99,000 KRW per month." The last player, LG Uplus, is in the final stages of adjusting a differentiated plan from the other two companies. Industry insiders expect LG Uplus to create a plan in the 60,000 KRW range with 30-40GB of data.

Mobile carriers expect that the introduction of mid-tier plans will effectively attract 3rd generation (3G) and 4th generation (4G LTE) users who are looking to enter the 5G market. They also anticipate that demand for plan changes will increase more than usual in line with the launch of Samsung Electronics' 4th generation foldable phones, the "Z Fold" and "Z Flip." Additionally, the introduction of eSIM next month is a positive factor for subscriber growth. With dual SIM usage, one person can subscribe to two plans. An eSIM functions the same as a USIM but, unlike a USIM, it is a subscriber identification module (SIM) embedded in the device’s chip, allowing users to download the carrier’s profile using QR codes, etc.

As 5G services enter their fourth year and become more mainstream, the number of people using 5G steadily increases even without separate marketing offensives. According to the Ministry of Science and ICT, the number of 5G subscribers, which was 16.45 million at the end of June last year, increased by 8.13 million to 24.58 million in one year. It is expected that 5G subscribers will easily surpass 30 million within this year. With the increase in 5G subscribers, the proportion of 5G users among all subscribers exceeded 50% for the first time in the second quarter. This means one out of every two subscribers uses 5G services. The average revenue per user (ARPU) is also improving. SKT’s ARPU is 30,656 KRW, up 0.8% from the previous quarter and 0.7% from the same period last year. SKT expects to secure 13 million 5G subscribers within the year through mid-tier plans. KT aims to increase 5G penetration to 60% by the end of the year.

An industry official said, "When new smartphones are usually released, number portability temporarily increases due to aggressive marketing competition among carriers," adding, "Although the increase in number portability has somewhat slowed recently as carriers reduce marketing costs, changes are expected as consumers choose reasonable plans amid the growth of the unlocked phone market."