"Thorny Path from the Start"... What Kind of Telecom Market Did StageX Dream Of?

Aiming for High-Quality Innovative 5G Services
But Full Government Support Needed for 6G Investment
Experts Unite on Lack of Business Feasibility

StageX's entry into the 4th mobile telecommunications market is facing a crisis, prompting calls for a more thorough analysis of business feasibility and market demand forecasts. Experts argue that the government’s initial overestimation of the 4th mobile carrier’s business potential was the core issue.

On the 20th, Professor Lee Sung-yeop of Korea University pointed out, "The government should have objectively assessed the growth potential of the 4th mobile carrier, considering the characteristics of the 28 GHz frequency band and the saturation of the telecommunications market, before proceeding with the process." He added, "StageX currently lacks sufficient capability and capital to operate as a telecommunications business," and warned, "This could lead to difficulties in attracting initial investors."

Professor Lee Byung-tae of KAIST said, "It is true that without full government support, it is difficult for latecomers to survive in the telecommunications market," adding, "The government’s 400 billion won policy financing support likely stems from this reality." He continued, "Given the enormous investments required for 5G and upcoming 6G, it is necessary to question whether pushing forward with the economically unviable 4th mobile carrier business was appropriate."

The Need for a 4th Mobile Carrier Has Been Consistently Raised

For over 30 years, the mobile telecommunications market has been dominated by a triopoly of SK Telecom, KT, and LG Uplus, leading to continuous calls for the necessity of a 4th mobile carrier. President Yoon Suk-yeol and former Korea Communications Commission Chairman Lee Dong-kwan have criticized the carriers using the term "telecom cartel." The Ministry of Science and ICT encouraged the activation of the MVNO (Mobile Virtual Network Operator) market and the launch of mid-to-low priced plans to enable citizens to access affordable telecom services. Additionally, the 28 GHz frequency band reclaimed from the three major carriers was allocated to the 4th mobile carrier to act as a market disruptor. Establishing market order, improving telecom service quality perceptible to consumers, and achieving innovation through advanced technology made the 4th mobile carrier one of the alternatives.

StageX aimed to secure the 28 GHz frequency band to provide mobile telecommunications services more than three times faster than existing 5G. In particular, it sought to actively benchmark Rakuten Mobile, which launched as Japan’s 4th mobile carrier, as a successful model. The strategy was to offer free 5G data to subscribers in the first half of next year to let them experience ‘Real 5G’ first and continuously attract new subscribers.

Rakuten Mobile, which launched in April 2020, made a bold move by offering a ‘0 won plan’ for one year. It disrupted the pricing structure by providing unlimited data at half the price of existing carriers. Established carriers like NTT Docomo, KDDI, and SoftBank hurriedly responded by launching mid-to-low priced plans and online-only plans, contributing to reduced household telecom expenses. Rakuten Mobile simplified complicated procedures such as canceling previous carriers into a one-click subscription process, enhancing user convenience. It also set a goal to cover all regions of Japan by 2026 using low-earth orbit satellite communication technology in partnership with its U.S. partner AST.

Utilizing Super Apps and Advanced AI Technology

StageX planned to build a differentiated customer experience by creating a telecom super application (app) like Singapore’s carrier Circles.Life. The super app provided a variety of services ranging from carrier subscriptions to commerce, finance, and various events. About half of Circles.Life’s subscribers visited the app daily, generating high engagement. Thanks to this, Circles.Life improved the average revenue per user (ARPU) by 35% compared to existing carriers, strengthening its business viability.

In this regard, StageX decided not to have offline stores and planned to respond promptly to customer needs online through the super app. They aimed to develop technology for immediate customer support within the app and early detection of service disruptions. StageX also revealed a strategy to provide 5G services using the 28 GHz frequency band at crowded locations such as airports, stadiums, and concert halls. The plan was to build telecommunications infrastructure centered on artificial intelligence (AI) and cloud technology to increase efficiency, reduce costs, and offer affordable plans. However, after receiving a cancellation notice from the Ministry of Science and ICT regarding the 4th mobile carrier business operator selection, these plans are at risk of falling apart.

Meanwhile, opposition parties such as the Democratic Party and the Innovation Party have vowed to hold the government accountable for the policy failure. On the 25th, the Science, Technology, Information and Communications Committee plans to hold a full meeting to investigate the causes of the failure to introduce the 4th mobile carrier, summoning the Minister and Vice Minister of the Ministry of Science and ICT.

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