Affordable 5G Phones Speed Up... Mid-Tier Plans Open the Door

KT M Mobile Launches First Service... Competitors Expected to Follow

[Asia Economy Reporter Oh Su-yeon] The budget phone industry has introduced a 5G mid-tier plan. With budget phone plans that closely match consumers' actual data usage now available, it is expected to alleviate the burden of household communication expenses.

According to the telecommunications industry on the 4th, KT M Mobile launched the first 5G mid-tier plan in the budget phone industry the day before. The newly launched plans include two types: ‘5G Call Unlimited 20GB’ (20,900 KRW per month), which offers unlimited voice calls and texts along with 20GB of data, and ‘5G Data Enough 20GB·200 Minutes’ (24,900 KRW per month), which provides 200 minutes of voice calls, 100 texts, and 20GB of data. Considering that the mid-tier plans from the three major telecom companies offer 24 to 31GB at 59,000 to 61,000 KRW per month, these are about half the price.

Starting with KT M Mobile’s launch of the 5G mid-tier budget phone plan, competitors are expected to follow with similar plans. Since KT provides the 5G mid-tier plan to KT M Mobile, other operators using the KT network can also launch similar plans.

SK Telecom, designated as the wholesale provider with the largest market share in the telecommunications market, completed consultations with the Ministry of Science and ICT last month regarding the launch of a 5G mid-tier budget phone plan. Currently, negotiations with individual operators are underway, and they plan to wholesale a 5G mid-tier plan consisting of about 20 to 30GB of data to budget phone providers by the end of this month. LG Uplus is currently discussing wholesale prices with individual budget phone operators, and nothing has been decided regarding mid-tier plans.

Currently, LTE is the main plan for budget phones, but the number of 5G plan subscribers is rapidly increasing. According to the Ministry of Science and ICT’s ‘Wireless Communication Service Statistics,’ as of the end of October last year, 90.3% of all subscribers use LTE. The number of budget phone 5G users is about 130,000, accounting for only 1.1% of the total. However, it has increased rapidly, tripling in just one year.

This is also expected to help improve the profitability of the budget phone industry. When comparing plans that provide the same data, the average revenue per user (ARPU) for 5G subscribers is higher than for LTE, so the more diversified the 5G plans, the greater the profits for budget phone operators.