How much will 5G cost us?

December 18, 2018 14:25
Mass upgrade to 5G may take a few years after the services are rolled out, as consumers will wait for service plans and handsets to become more affordable. Photo: Bloomberg

Fifth-generation mobile services are witnessing gradual rollout in some markets in the world. A look at the current offerings will give us some clues as to how much we, as consumers, might end up paying extra in fees for the new high-speed phone networks.

While the first batch of 5G compatible smartphones from Chinese makers are likely to cost as much as Apple's current flagship iPhone, the service fee for usage of 5G data may represent a modest premium over that for the existing 4G networks. All in all, consumers can expect to enjoy the latest technology at relatively affordable prices.

South Korea and Finland are two countries that have taken the lead in launching 5G mobile service. In Korea, KT, the nation's largest telecommunications company, last week officially launched its 5G network commercial service, with an AI-equipped robot named Lota as the first 5G subscriber.

The first mobile plan available on KT's 5G network is 10 gigabytes of data for a mobile hotspot terminal at a monthly rate of 49,500 won (US$43 or HK$335). The fee should not be considered expensive, given that in Hong Kong such monthly bill currently fetches less than 10GB 4.5G data.

The new service has begun in the greater Seoul metropolitan area and major metropolitan cities outside Seoul and in Jeju, Ulleung and Dok islands. KT plans to expand its 5G network to 24 major cities, key transport routes such as expressways, subways, high-speed railways, large universities and neighborhood shopping areas.

The next phase of the new network will provide seamless 5G coverage through KT's latest network technology and innovation, the company said in a Dec. 13 press release.

Elsewhere, Finland’s Elisa has announced its own 5G rate plans. The Finnish company said its 5G data plan costs 50 euros per month (about HK$500) for unlimited usage. That makes it a little bit more expensive than South Korean offering, yet consumers there should find it acceptable. In addition to local data usage, the plan includes 20GB of mobile data for people to use in other EU countries.

Elisa said its 5G network would be charged under the plan once the network is available for public access. Prior to the launch of 5G, Elisa provides services through 4.5G network with speed of up to 600Mbps.

While the service rate plans are pegged above those for existing 4G data plans around the world, 5G-compatible smartphones could be far more expensive than what some users may have anticipated, when the products hit the street next year. China, the largest mobile market, will take the lead in the mass deployment of 5G new network with more than 30 models of 5G compatible handsets joining the pre-commercial trial before the service launch.

Last week at the China Mobile Global Partner Conference, leading Chinese phone makers, including Xiaomi, OnePlus, OPPO, Vivo and ZTE, showcased 5G  devices featuring the Qualcomm Snapdragon 855 mobile platform and Snapdragon X50 5G modem.

China Mobile predicts that in the 5G pre-commercial phase in 2019, the number of tested and pre-commercial 5G terminals may be more than 30. The pricing of 5G mobile phones is expected to be above 8,000 yuan. The price tag for the 5G phones is similar to what flagship smartphones from Apple and Samsung command now. 

For mass upgrade to 5G, the industry in China will need cheaper handsets from local smartphone brands. China Mobile expects that by 2020 more than 60 models of 5G devices would hit the street and the price may even fall to the 1,000 yuan level.

China Mobile, on its part, will launch its own brand 5G smartphones to help boost the service penetration. The telecom giant's chairman Shang Bing said last week that his firm will launch N5 and N5 Pro smartphones in the first half of 2019. In other initiatives, China Mobile will launch a 10 billion yuan fund to push 5G industry supply chain.

As 5G is still in its initial stage of development, consumers may need to wait for at least two years before prices of the latest high-speed services and the compatible smartphones settle down and become more affordable.

The industry will see a churn as various players slug it out in the market, but consumers will benefit ultimately from faster networks and advanced mobile technology.

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EJ Insight writer