Signaling Need for Switch to 5G
The amount of per-capita use of data by Korean long term evolution (LTE) smartphone users exceeded seven gigabytes (GB) for the first time ever. The amount has increased considerably due to a data use rate cut in accordance with a spike in contract-based discount rates and the consumption of visual contents such as those on YouTube. Some analysis says that this data usage trend will touch off a switch to 5G telecommunication.
According to the Ministry of Science and ICT on May 7, the amount of per-capita data use by Korean LTE smartphone users stood at 7,080MB as of March, topping 7GB in one year since recording 6,095MB in March of last year.
This increase in the amount of data use is led by YouTube, which has been enjoying the rapid growth of its users in recent years. According to the Ministry of Science and ICT, smartphone users in Korea used 54.4% of the amount of their data use in order to watch videos, followed by the use of web portals (17.5%) and social network services (17%). According to market researcher WiseApp survey, Korean YouTube usage time more than tripled from 7.9 billion minutes in March of 2016 to 25.7 billion minutes in February of this year.
There is also analysis that a rise in the data usage of unlimited rate subscribers took the lead in expanding the total volume of use. In related statistics, the average data usage volume of unlimited data plan subscribers stood at 19.3GB, while that of general plan subscribers reached about one tenth of 1.8GB. First of all, the former swelled by more than 1GB compared to three months ago, while the latter sank by more than 0.1GB.
Such a data usage increase will play out in favor of mobile operators at first glance. This is because in addition to securing additional profits from increased data use, mobile carriers can expect additional income from 5G services which will be launched in March of next year. 5G is able to transmit data about 20 times faster than LTE, so demand will increase if data usage volume surges as it does now.
However, an increase in data usage volume can lead to a rise in household telecom expenses so more pressure will be put on mobile service operators in order to make them pare down telecom service cost. So, an increase in data usage volume can be a double-edged sword to telecommunication service companies. Above all, this trend can affect the universal plan currently under the review of the Regulatory Reform Commission. The universal plan is a government-backed product that offers 1GB of data and 200 minutes of calls for about 20,000 won (US$18) per person. However, given current trends in data usage, pressure can mount to make mobile carriers increase basic data supply.
“A recent increase in the number of high-definition video services will spark off a bigger spike in data use volume," a telecom service industry official said. “However, nobody can say that demand for 5G services will grow, unless key contents such as those for virtual reality (VR) or augmented reality (AR) increase and gain in popularity.”