The venues of the Pyeongchang Olympics is supposed to offer spotless connection services, after years of meticulous preparation and promotion. But sometimes, even the country with the fastest internet speed in the world has its glitches: “I meant to tweet more but…the wifi kept cutting out,” tweeted Wall Street Journal correspondent Jonathan Cheng at the opening ceremony on Feb. 9.
“I can’t stop complaining about internet access at #Pyeongchang Olympics,” tweeted Bloomberg correspondent Sam Kim the next day.
The incident must have come as a shock to KT, Pyeongchang’s exclusive telecommunications partner, which built and manages the Olympics communications system in and outside of the stadiums in Pyeongchang and Gangneung (KT provides wifi network inside the Olympic venues). The company is branding itself with speed and connectivity; slow internet connection is not just a technical hassle, it’s a potential burn to its reputation.
5G is its jingle
KT has been using its Olympics privilege to promote its latest 5G technology, in a bid to outrun local rival SK Telecom (SKT).
SKT is the biggest wireless carrier in South Korea, with a market share of 44.1 percent opposed to KT’s 25.6 percent in June 2016, according to Korea Information Society Development Institute. The rivalry between SKT and KT, South Korea’s two telecommunications giants, is fierce.
Among many examples, recently in December 2017, SKT attempted to steal (or share, depending on whom you ask) KT’s Olympic thunder via ambush marketing, in this case, television ads.
Not being an official Olympics sponsor, SKT is not allowed to use the Olympic name or logo in its advertising. But the company attempted to get around this restriction by running a TV commercial featuring Kim Yuna, former ice skating champion and the undisputed darling of South Korean sport, with catchphrases such as, “Welcome to 5G Korea” and “See You in Pyeongchang” in December 2017.
When KT filed a complaint against SKT, the Korean Intellectual Property Office ordered the latter to stop running the advertisement.
South Korea’s inter-telco competition really heated up ahead of the Pyeongchang Olympics. In the same month, KT sued rival SKT for damaging KT pipe conduits and installing its own optic fiber cable ahead of the Olympics.
The telco firms’ latest battle is their race to become South Korea’s leading 5G provider, with SKT and KT battling it out to claim the “world’s first” 5G network provider crown. When they arrive, 5G networks will be 10 to 100 times faster than their current 4G counterparts, boasting data transmission speeds of up to 10 Gb per second (For example, it should take just take a few seconds to download a two-hour film using 5G). The providers are promising different uses, ranging from IoT to disaster rescue scenarios and even keeping out wild boars from destroying crops.
The potential market for 5G is huge, and set to lead to $12.3 trillion in global economic output by 2035 according to a research firm IHS Markit.
For now, it seems that KT is winning, as it flaunts its first pilot 5G experience in Pyeongchang before thousands of cameras from all over the world. The company has showcased various 5G technologies in and outside of stadiums in partnership with Samsung and Intel.
This doesn’t mean that KT is ready to roll out its 5G technology any time soon. “The 5G trial run by KT is the first in the world. But what counts is the commercialization of the service. Everyone is trying to be number one,” said Kim Hong-sik, analyst at Hana Financial Investment Co. “Verizon and Sprint already claim they can roll out the 5G technology this year.”
While the global standard for 5G has been set last year, it is now up to the local government to define how 5G looks like for each respective market.
“There is only one important [telecommunications network] standard that the market accepts: 3GPP (The 3rd Generation Partnership Project),” said an official from the Ministry of Science and ICT, who spoke on the condition of anonymity. “The global standard for 5G technology was set by 3GPP last December– with KT and SKT contributing to building its specifications. Companies will be using this standard for commercialization of 5G in the future.” the employee told Korea Exposé.
As of now, there is no national 5G standard, that is to say, there is no standard frequency set by, in this case, the South Korean government.
“There hasn’t been frequency allocation for 5G. [Localized] technology standards haven’t been established [by the government] so it doesn’t matter which company gets the 5G technology rolling out first. They will all launch almost at the same time. The time difference between different companies will be only a matter of weeks,” said Namgon Choi, analyst at Yuanta Securities.
The South Korean government plans to allocate the standard frequency for 5G during the first half of this year and commercially deploy the technology on March 2019.
Despite a flurry of promotions about 5G technology, neither SKT nor KT seem to be particularly attractive choices for investors at the moment. Both firms posted lower-than-expected fourth quarter operating income for 2017. “On top of bad fourth quarter earnings, the regulatory pressure to lower the phone bill remains as one of the risk factors for investors,” said Choi.
Cover image: KT demonstrating its 5G technology at the Olympics venue in Pyeongchang. (Source: Courtesy of KT)