The World's First Commercialized 5G, Industrial Site Usage Rate Remains a Wasteland

Utilization Rate on Site Remains at 1% for 2 Years
96% of Companies Say "We Don't Use 5G"
Service Content Still Lacking
Demand for Related Equipment Also Declining

[Asia Economy Reporter Cha Min-young] Despite the ambitious launch of the world's first commercial 5G, the utilization rate of 5G in industrial sites has remained below 1% for the second consecutive year. Since last year, government-led 5G specialized networks such as ‘I-eum 5G’ have been implemented as alternatives, with Naver becoming the first company to adopt it. However, there have been ongoing criticisms that services were launched first, and only now are companies trying to find practical uses for them.

96% of Companies "Do Not Use or Are Unaware of 5G"

According to the Ministry of Science and ICT’s ‘2021 Informatization Statistics’ released on the 3rd, as of 2020, only 1.9% of private sector companies with 10 or more employees recognized and utilized 5G technology and services, failing to surpass the 1% range. This was a mere 0.8 percentage point increase compared to 1.1% in 2019.

The number of companies aware of 5G technology and services but without plans to utilize them increased significantly. The proportion of respondents who answered that they "are aware of 5G industrial applications but have no plans to use them" rose to 69.0%, up 6.8 percentage points from 62.2% the previous year. Those who did not know what 5G services are still accounted for a high 26.8%. There were also large differences by industry. The highest 5G utilization was in arts, sports, and leisure-related services (4.5%), followed by information and communications (4.2%), construction (3.3%), real estate (2.8%), and science and technology services (2.4%). In contrast, agriculture, forestry, and fisheries (0.1%), finance and insurance (0.5%), health and social welfare services (0.6%), and manufacturing (0.9%) all recorded below 1%.

The smaller the organization, the sharper the drop in 5G utilization. Among workplaces with fewer than 49 employees, only 1.8% used 5G, while 2.3% of workplaces with 50 to 249 employees and 3.6% of workplaces with 250 or more employees reported using it. Between sole proprietorships and corporate entities, the 5G utilization rate was higher in corporations at 2.1%, compared to 1.0% for sole proprietorships.

Still Unable to Present What to Do with 5G

Marking the third anniversary of 5G service commercialization this year, the core issue remains the lack of services and content. Key services such as autonomous vehicles, smart cars, virtual reality (VR), and augmented reality (AR) technologies are still under development. Both domestically and internationally, interest in enterprise (B2B) specialized network services, which were expected alongside 5G technology adoption, has declined, leading to reduced demand for related equipment. According to Dell'Oro Group, Samsung Electronics’ global market share in 5G communication equipment and devices was 2% cumulatively for the first to third quarters of 2020, down from 3% in 2019. Huawei holds an overwhelming first place with a 30% market share, but excluding the Chinese domestic market?which has the highest 5G penetration rate worldwide?Samsung’s share is modest.

The government is directly creating 5G specialized network services under the name ‘I-eum 5G’ and is working to establish successful cases. Naver, the first company to adopt the specialized network, introduced the ‘5G Brainless Robot’ using I-eum 5G and is expanding innovative cases through various B2B businesses. Kakao Enterprise is considering establishing a safety management system to prevent major accidents and plans to explore the possibility of using I-eum 5G for this purpose. Yongin Severance Hospital is also experimenting with the introduction of a 5G+ intelligent hospital. However, many projects have been criticized as forced cases since they can be sufficiently implemented using LTE networks.

A telecommunications industry official commented, "In the case of LTE (4G) services, services were developed alongside the technology from the early stages, but with 5G, the technology was developed first," adding, "Without prior consideration of service development, services started first, and for over three years, we have only been repeatedly pondering what can be done with 5G."

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