By Timothy W. Martin, Sarah Krouse and Na-Young Kim
The 5G era for smartphones began on Wednesday, providing the
world's first glimpses at what the much-hyped network technology
can offer consumers and how much the speed upgrade will cost.
Verizon Communications Inc. launched 5G wireless service in
parts of Chicago and Minneapolis on Wednesday, a week ahead of its
planned start date, while carriers in South Korea deployed their
service in the Seoul metropolitan area the same day.
It is unclear which country struck first. South Korea's large
carriers, which had eyed a Friday start, hustled to switch on 5G
services at 11 p.m. local time. Both SK Telecom Co. and KT Corp.,
the two largest operators, claimed to have the world's first 5G
smartphone subscribers. Verizon said its customers in those two
cities were the first.
South Korea's 5G launch, which covers about half the country's
population, promises to facilitate online experiences that would
exhaust the mobile networks of today: eight-way video calls,
holograms, virtual "star dates" with K-pop idols and streaming live
sports at a screen resolution triple that of an IMAX movie.
The mobile industry is betting 5G service, with speeds up to 100
times faster than current networks, will replicate the
breakthroughs enjoyed from 4G -- which reshaped the way people
order takeout and hail taxis and helped spawn services such as Uber
and Instagram. The ultimate vision is for the faster speeds to
enable self-driving cars, power smart cities and birth immersive
digital worlds.
At first, 5G's offerings will focus on refining some of the tech
world's niche activities, such as augmented reality and
high-powered mobile gaming. Most countries -- including the U.S. --
are still building out 5G network infrastructure that for the most
part won't be ready for at least another year.
To tap into the 5G network, Verizon users will need a Motorola
phone with a clip-on modem that upgrades the device from 4G
networks. The carrier plans to sell Samsung Electronic Co.'s
5G-enabled Galaxy S10 handset in the first half of the year.
Verizon, the largest U.S. carrier by subscribers, is charging
users of its unlimited data plans an additional $10 a month per
phone for 5G, with the first three months of service being
free.
Korean early adopters, for now, will be limited to Samsung's
Galaxy S10 handset, which starts around $1,225. To entice buyers,
South Korea's carriers are offering monthly data plans as low as
$36, comparable to current 4G pricing. They are also giving away
home appliances, virtual-reality headsets and fried-chicken
coupons.
On a recent afternoon, Hwang Hae-ryung, a 22-year-old college
student, visited a pop-up 5G store in downtown Seoul opened by LG
Uplus Corp., one of South Korea's largest carriers. She went on a
10-minute virtual-reality "star date" with a K-pop idol that the
faster streaming speeds made possible.
"My heart was fluttering," said Ms. Hwang, who now plans to
upgrade to a 5G-enabled device. The data, however, would have
consumed nearly one-fifth of LG Uplus's low-cost monthly 5G
plan.
Hundreds of Verizon employees have spent recent weeks driving
and walking around downtown Chicago and Minneapolis testing the
performance of the faster network, including inside U.S. Bank
Stadium. The Minneapolis arena is scheduled to host the Final Four
of the NCAA men's college basketball this weekend.
The results of network tests were strong enough in recent days
to move up the launch, Verizon CEO Hans Vestberg said in an
interview.
"When the quality is on the level that customers expect and that
we are expecting, we go," said Mr. Vestberg, who owns both the
Motorola phone with the clip-on modem and the yet-to-be released
Samsung device. Verizon has sold tens of thousands of the Motorola
devices since the end of last year, a spokesman said.
The adoption of 5G devices will be gradual, projected to account
for just over one-quarter of global smartphone shipments by 2023,
according to market researcher International Data Corp. The embrace
is likely to pick up next year with the expected launch of Apple
Inc.'s first 5G-enabled iPhone.
South Korea, known for its ultrafast internet, will boast the
world's highest 5G penetration this year and next, when ownership
reaches 11%, according to Strategy Analytics, a market researcher.
But larger markets, like the U.S., Japan and China, are expected to
start leapfrogging South Korea by 2021.
About 10 to 20 phones enabled for 5G will launch world-wide this
year, and users are likely to encounter "teething problems," as
they did during prior introductions of next-generation network
phones, said Neil Mawston, an analyst at Strategy Analytics.
"Expect high prices, short battery life, heavy device weight, or
outsize hardware," Mr. Mawston said.
South Koreans will get the first look using phones that can
stream five online channels simultaneously. Samsung will have the
5G phone market to itself until April 19, when hometown rival LG
Electronics Inc. releases its handset.
"We are excited to see what's possible," D.J. Koh, Samsung's
mobile chief, said in an emailed statement.
Out of the gates, half of South Korea's roughly 50 million
residents will live in 5G-ready areas. LG Uplus uses network
equipment from four major global suppliers, including Huawei
Technologies Co. The country's two other main carriers source from
Nokia Corp., Ericsson AB and Samsung.
China's Huawei has been fending off American accusations around
the globe that its 5G network gear poses a cybersecurity threat --
which the Chinese company forcefully denies.
South Korea's big carriers have concocted a labyrinth of pricing
tiers to woo buyers. The priciest data plans cost around $115 a
month, on a two-year contract, and don't include the phone's
cost.
Carriers in the U.S. have largely been quiet about their pricing
plans. They have also sparred over the branding of the faster
networks and what type of service qualifies as "real" mobile 5G
service.
Sprint Corp. in February sued AT&T Inc. over a branding
campaign. Sprint said AT&T has falsely told customers they are
receiving 5G service on their smartphones by adding a "5GE" label
to screens to indicate higher-bandwidth service, when subscribers
are in fact still experiencing 4G LTE. The E in the new tag stands
for evolution.
AT&T has said the tag is an "evolutionary step" in building
out its 5G network. "We are going to fight this lawsuit. In the
meantime, we will continue to deploy 5G Evolution for our
customers," an AT&T spokesman said.
Verizon has also faced criticism from rivals for its 5G
advertising. The National Advertising Division of the Council of
Better Business Bureaus, an advertising industry self-regulator,
last month recommended the carrier change or scrap a series of
television ads that the industry group says send the "unintended
message that Verizon has launched 5G mobile wireless network."
Verizon has said it thinks the group "failed to properly
evaluate the net impression" of the commercials.
"We absolutely plan to appeal," a Verizon spokesman said.
Write to Timothy W. Martin at timothy.martin@wsj.com and Sarah
Krouse at sarah.krouse@wsj.com
(END) Dow Jones Newswires
April 03, 2019 22:37 ET (02:37 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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