Korean 5G Users to Seek Compensation for Poor Quality of Service

Korean 5G Users to Seek Compensation for Poor Quality of Service

Hundreds of 5G smartphone users in South Korea are getting together to take legal action against the country’s three mobile operators for alleged poor quality of service, according to a news report. They claim the 5G service is not good enough to justify the higher prices of plans.

Around 1,000 5G users have expressed their intent to take part in the collective lawsuit to seek at least KRW 1 million (US $884.32) in compensation per user from the three mobile carriers, according to Kim Jin-wook, a lawyer at law firm Joowon, which is spearheading the legal action. Kim argues that 5G network quality is not a discernible improvement from previous 4G/LTE networks and has drawbacks such as limited availability.

The three telecom operators had deployed 166,250 5G base stations as of November last year, which is just 19 percent of the number of 4G/LTE base stations, according to Opensignal. South Korea’s 5G coverage is focused on major urban areas, such as Seoul, with carriers aiming for nationwide coverage by next year.

The operators initially advertised 5G download speeds as being 20 times faster than LTE, but a government report last year found that average 5G download speeds were around four times faster than those of 4G/LTE. With monthly 5G plans costing around KRW 50,000 more than 4G plans, some users want compensation for the disappointing performance. Kim said that the lawsuit would be filed in May after gathering more participants.

Tarifica’s Take

The most obvious takeaway from this story is that operators would do well not to overpromise and then underdeliver. When advertisements suggest that 5G will be 20 times faster than 4G and it ends up being only four times faster, disappointment is bound to ensue. Whether or not a court eventually makes the major operators pay compensation to the plaintiffs, the operators will certainly have suffered a public-relations defeat resulting in possible loss of revenue in the future. Whichever the outcome, this kind of trouble is fairly easily avoided.

The larger issue, though, has to do with the actual speeds and quality level of 5G networks. One of the main causes of below-expectation speeds is congestion. Given that the number of 5G base stations is less than one-fifth of the number of 4G base stations, it is not surprising that 5G coverage is much less and that demand for bandwidth may often outstrip supply. In order to be able to build out the 5G networks to the point where they are capable of living up to their full potential, the operators need to have high levels of subscription. But if users are disappointed by shortfalls in speed, subscription levels will not increase and may even decrease. So by overhyping speeds, the operators run the risk of not being able to reach the speeds they really could, given enough time.