South Korea’s mobile communications market is undergoing a transformative phase, marked by a notable slowdown in the growth of 5G subscribers that fell below 1 percent for the first time. In contrast, the markets for artificial intelligence (AI) and cloud services via telcos are rapidly growing.
According to wireless communication service subscription statistics from the Ministry of Science and ICT, the number of 5G subscribers in South Korea was 31,795,052 as of the end of September 2023, showing a modest increase of 0.91 percent compared to the previous month.
This dip below the 1 percent mark is the first since the commercialization of 5G in April 2019, indicating market saturation. It also had a significant impact on overall subscriber rankings, with LG Uplus overtaking KT in total subscribers as of September. SK telecom led with 31,168,214 subscribers, followed by LG Uplus with 18,016,932 and KT with 17,133,388. LG Uplus securing second place is a noteworthy development and is its first time in the position since it started offering services in 1997.
LG Uplus has strategically focused on the Internet of Things (IoT), securing a substantial contract for IoT lines dedicated to KEPCO’s metering services. Remote control lines, encompassing communication in IoT for remote metering and streetlight control, increased by about 1.35 million from 3,785,948 in August to 5,131,014 by the end of September.
“The IoT market for remote metering, such as water and electricity, provides stable revenue through long-term contracts once secured,” a LG Uplus official said.
As mobile communication lines are almost saturated, the substantial increase in IoT lines has led to a reshuffling of corporate rankings. LG Uplus has been making strides in the IoT sector related to mobility, securing exclusive contracts for wireless communication lines with Hyundai, Kia, and Genesis cars since January 2023. Furthermore, beyond line supply, the telco is expanding into the entertainment market by integrating various platforms including IPTV, Sporki, and Kid’s Land.
This reflects LG Uplus’s goal of strengthening its identity as a platform business through its ‘U+ 3.0’ strategy based on the four platforms of communication, play, growth care, and web 3.0.
SK telecom and KT are also diversifying their focus beyond traditional communication services. SK telecom has set an aggressive goal of increasing the revenue share of its AI business from 9 percent in 2021 to 36 percent by 2028. With its newly introduced hyperscale AI service, ‘A.dot,’ SK telecom is expanding into AI data centers and AI semiconductors.
For its part, KT accelerated its AI strategy with the launch of the hyperscale AI model ‘Mi:dm’ on October 31. Targeting the business-to-business (B2B) market, Mi:dm offers four lineups to allow companies to easily customize and utilize its AI solution.
By Jeong Ho-jun and Minu Kim
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