Uncompetitive 5G Tech
There are increasing concerns about the possibility of Chinese and European communications equipment suppliers dominating the Korean 5G mobile communications market.
According to industry sources on July 21, three local mobile carriers and the Ministry of Science, ICT and Future Planning are accelerating efforts to develop 5G tech, but most of them rely on foreign enterprises for development.
The three carriers are actively seeking technical partnerships with large foreign companies prior to 5G commercialization in 2020. KT opened an R&D center for 5G tech inside its research center in Seoul in June, which has a 5G test environment for a 991.5 m2 complex. The nations' second-largest carrier opened this facility exclusively to Ericsson, Nokia, Alcatel-Lucent, Huawei, and ZTE. SK Telecom and LG U+ also announced their plan to build a testbed together with foreign telecoms equipment makers.
The local communications equipment industry is worried about the possibility that foreign companies will dominate the local 5G mobile communications market, as in the case of LTE. Mobile communications networks were mainly composed of base stations and repeaters until the 3G era. Large local companies built base stations using foreign equipment, but the local industry was in charge of repeaters.
In the LTE era, however, foreign companies replaced repeaters with remote radio heads (RRHs). The role of RRHs is similar to that of repeaters, but foreign communications equipment suppliers did not disclose the standard technology that connects large base stations and RRHs, thereby virtually dominating the industry. As a result, local small and mid-sized companies that produce repeaters were in imminent danger of collapse.
China, in particular, is aggressively targeting the 5G mobile communications market. The country already established national high-tech R&D programs in 2013, and the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Science and Technology are jointly carrying out tasks of the IMT-2020 Promotion Group for 5G technology research. Huawei, the top-ranked communications equipment supplier, is pursuing a five-year R&D project worth US$600 million (800 billion won) to develop 5G tech. During the process, Chinese companies are recruiting high-performance workers from Korea and sweeping patents for 1G to 4G tech into their baskets with full governmental support. They reportedly recruited former Samsung employees as well, known as top-class experts in 5G tech.
Hence, experts are saying that if this trend continues, Korea is likely to lag behind China in the global equipment and services markets for 5G communications.