B2B Sales Forecast to Surge
South Korean wireless carriers are set to launch the world’s first commercial 5G network across the country on Dec. 1. As the social and economic value of the global 5G industry is expected to reach 48 trillion won (US$42.82 billion) by 2030, the nation’s three telecommunication providers – SK Telecom Co., KT Corp., and LG Uplus Corp. – are planning to secure the global leadership in the core areas of the 5G industry, such as mobility and healthcare, as their future growth engine.
According to mobile communications industry sources on Nov. 29, SK Telecom, KT, and LG Uplus will start providing 5G services in Seoul and major metropolitan cities from 00:00 am on Dec. 1.
The mobile carriers are considering 5G services as a new future growth engine that will drive their growth for the next 10 years. Their sales are currently skewed towards the business to customer (B2C) market based on general customers. When the 5G era begins, business to business (B2B) sales are forecast to explode.
5G is a next-generation network designed to be up to 20 times as fast as today’s 4G Long Term Evolution (LTE) network and has the technical characteristics connected to the fourth industrial revolution, including hyper-connectivity and ultra-low latency. People in general don’t see how innovative 5G is because they find no inconvenience from using key services, like video streaming, via the LTE network. However, the speed of 0.1 second can make a huge difference in the healthcare and mobility industries. This is why mobile service providers are also preparing for B2B business related to 5G services.
According to the Ministry of Science and ICT, the ratio of communication lines that are generally used for the B2B area such as vehicle control, broadcast control, wireless payment and other Internet of Things (IoT) to the total lines of mobile carriers was only around 10 percent as of September. KT, which has a relatively high ratio of B2B transaction, accounted for 12.6 percent, followed by LG Uplus with 11.9 percent and SK Telecom with 6.9 percent. This is why telecommunication providers’ business showings plunge every time political issues occur, like the reduction of telecommunication fees. When the companies strengthen B2B business in the 5G era, their business structure which is vulnerable to political variables can improve as well.