COVID-19 and Salty Water Subsidies... Frozen Growth of 5G Subscribers

[Asia Economy Reporter Joselgina] The growth of domestic 5G mobile communication subscribers is clearly slowing down. Due to the impact of the novel coronavirus infection (COVID-19), consumer sentiment has also frozen, raising concerns that achieving the expected 15 million 5G subscribers this year may be difficult.

According to the Ministry of Science and ICT on the 8th, as of the end of January this year, the number of domestic 5G subscribers was counted at 4,958,439. This is an increase of about 290,000 compared to the previous month (4,668,154). The monthly increase is the lowest since the commercialization of 5G in April last year and has dropped by 70% compared to August last year. The 5 million subscribers expected to be surpassed by the end of last year were also not achieved.

This is interpreted as a result of the easing competition among the three major telecom companies and the reduction of subsidies. Last year, the three telecom companies, whose profitability deteriorated due to a cutthroat competition to secure 5G subscribers, signed a gentlemen's agreement to refrain from excessive subsidy competition.

The effect of Samsung Electronics' flagship smartphone Galaxy S20 series, which was expected to lead the 5G market, also fell short of expectations.

Initially, the industry expected that 5G subscribers would increase with the Galaxy S20 series, which started pre-orders in February, but this also took a direct hit from COVID-19. The low official subsidy, which is about half that of the Galaxy S10, is also evaluated to have frozen consumer sentiment.

This also means that, aside from subsidies, there is still no definite incentive for consumers to switch to expensive 5G plans. The fact that killer content has not yet emerged amid the situation where 5G infrastructure has not been properly established is also cited as a background for the slowdown in growth.

This content was produced with the assistance of AI translation services.