Will 4th Telecom StageX Collaborate with AI Businesses?

Device Distribution Plans with Samsung and Others
Pursuing B2B Businesses in Medical and Entertainment
Funding Power Key for Base Station Construction

StageX, selected as the 4th mobile carrier, is drawing attention regarding what business strategies it will pursue if it exclusively uses the 28 GHz frequency for 5th generation (5G) mobile communication. The key issue is whether StageX can effectively integrate the true strengths of 5G?ultra-high speed, ultra-low latency, and hyper-connectivity?into its services and collaborate with various businesses possessing artificial intelligence (AI) technologies.

StageX is a consortium led by StageFive, a budget phone company spun off from Kakao. Shinhan Investment Corp. has participated as a financial investor, securing funds worth 800 billion KRW, and it is known to be preparing various new services in collaboration with Yonsei Medical Center (Severance), KAIST, Intellian Technologies, and others. In particular, it plans to provide 5G services covering not only the B2B (business-to-business) market but also the B2C (business-to-consumer) market.

Having exclusive control over the 28 GHz frequency, StageX is expected to attempt collaborations with various businesses. The 28 GHz band 5G communication offers advantages such as high speed and large processing capacity. The strategy is to join hands with stakeholders from various fields to create added value in order to implement innovative 5G services that users can experience. It has already signed a strategic partnership with a mobile device manufacturing subsidiary within Foxconn. In the future, it plans to collaborate with device manufacturers such as Samsung and Apple to distribute devices supporting the 28 GHz band. If it provides differentiated services that the three major mobile carriers find difficult to follow, it is expected to play the role of a ‘catfish’ in the telecommunications market. Especially, if various AI technologies can be used quickly and conveniently, it could become an attractive factor for users.

Han Yoon-je, Strategy Director of StageX, who participated in the 5G 28 GHz frequency band auction.
[Image source=Yonhap News]

StageX is also attempting to launch new businesses in the B2B market, including healthcare, science, travel, and entertainment. After conducting demonstrations with KAIST, Severance Hospital, and others to discover service models, it plans to promote commercialization. If generative AI based on 28 GHz communication is introduced in the medical field, it could bring innovation to administrative tasks and enable personalized patient care. In the entertainment sector, leveraging the popularity of K-pop, it can provide immersive content such as virtual reality (VR) and augmented reality (AR). It also plans to implement 5G services in public facilities used by many people, such as airports, to enhance the national image.

The challenge lies in funding. According to the frequency allocation conditions, StageX must build more than 6,000 wireless base stations at 90 hotspots over the next three years. Due to the characteristics of the 28 GHz frequency band, which has weak diffraction, more base stations are required to reach farther distances, demanding significant investment costs. The final winning bid price of 430.1 billion KRW must be paid over five years, and additional roaming costs using the networks of the three major carriers are expected to require several hundred billion KRW more.

An industry insider said, "Since the Ministry of Science and ICT offered policy financing worth about 400 billion KRW and tax credits as incentives when recruiting new carriers, it remains to be seen whether government support measures will be properly utilized."