5G will zoom from myth to mass-market reality

SK Telecom Co

23/12/2020 08:37

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Ed Cropley
    LONDON, Dec 23 (Reuters Breakingviews) - 5G has had an
inauspicious start to life. Though politicians have spent years
debating security risks associated with suppliers of the
high-speed mobile technology, few people have used it.
Conspiracy theorists blamed it for Covid-19. And with mass
gatherings like concerts and sports events cancelled,
telecommunication bosses had few chances to show off their
latest toy. The stage is set for a dramatic coming-out party.
    The biggest factor in 5G’s favour is the availability of
cheaper handsets. Apple’s  AAPL.O  new iPhone 12 retails at $799
in the United States, only marginally more than the company’s
closest non-5G models. Handsets from rivals like Samsung
Electronics  005930.KS  or Huawei Technologies can cost as
little as $250. Except for the most obdurate Luddites, anybody
who upgrades their phone in 2021 will get one that works on new
5G networks.
    For telecom companies which have spent billions of dollars
buying wireless spectrum and installing kit, having consumers
using the service rather than just hearing about it is a relief.
In South Korea, historically an early tech adopter, the rollout
of 5G since April 2019 has helped arrest a steady decline in the
revenue operators extract from each user. SK Telecom
 017670.KS , which claimed nearly half of South Korea’s 9.25
million 5G subscribers as of September, reported a nearly 4%
year-on-year rise in quarterly sales in November. UK rival
Vodafone  VOD.L , whose revenue is likely to fall 3% in its
financial year ending March 2021, is watching with interest.
    The pandemic offers further cause for optimism. In late
2018, research by consultancy PwC suggested consumers might pay
$5 a month more for 5G networks’ improved reliability and
ultra-high-speed downloads. After months in which housebound
users have been forced to rely on intermittent home broadband
connections, that premium will only have gone up. And word of
5G’s superior performance will spread quickly as users return to
socialising and comparing gadgets.
    The real benefits of 5G lie in commercial applications like
smart factories, real-time voice translation, and
enhanced-reality gaming. Promised applications such as enabling
driverless cars or remote surgery in hard-to-reach locations
remain distant prospects. Even so, the power of phone envy means
5G will finally make its mark in 2021.
    On Twitter https://twitter.com/edwardcropley    
    
    CONTEXT NEWS
    - Worldwide sales of 5G-enabled mobile phones are expected
to hit 15 million in 2021, more than double the installed base
of 5G phones in the middle of 2020, according to Deloitte.
    - South Korea had 9.25 million 5G subscribers as of the end
of September 2020, accounting for 13.2% of nationwide mobile
users, Yonhap News Agency reported on Nov. 2.
    - For previous columns by the author, Reuters customers can
click on  CROPLEY/  
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Deloitte 5G report     https://www2.deloitte.com/uk/en/pages/technology-media-and-telecommunications/articles/digital-consumer-trends-5g.html
SK Telecom earnings statement    https://www.sktelecom.com/img/eng/qua/20201126/PressReleaseSKTelecomAnnounces3Q2020EarningsResults.pdf
Yonhap article     https://en.yna.co.kr/view/AEN20201102000700320
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Peter Thal Larsen, Karen Kwok and Oliver Taslic)
 ((ed.cropley@thomsonreuters.com; Reuters Messaging:
ed.cropley.thomsonreuters.com@reuters.net))