Telecommunications service markets in developed countries are both mature and highly competitive. Market leaders are forever locked in a battle to retain existing customers while lesser rivals seek to break off a larger market share. In such a competitive environment, winning new customers by offering an inspiring user experience is the key to success. ICT is the foundation of a good user experience – the company with the best technology will see its user base grow.
In Korea, LGUplus, one of the top three telecommunication operating companies, has been working closely with Huawei on its network to help increase its share of the market. By leveraging 4G technology, LGUplus has one-upped its competitors by comprehensively deploying a LTE network together with LTE-A technology that creates a 4G network experience which surpasses industry standards. In doing so, LGUplus was able to successfully reverse its inferior position in the Korean mobile telecommunications market.
When three LG telecommunication subsidiaries first merged to form LGUplus in 2010, it languished in third place in the Korean market. However, in the middle of 2011, LGUplus began a counterattack to propel itself to market leader. The company’s Executive Vice-President Sun Tae Kim remembers the period of change:“LG Uplus lagged behind our competitors in infrastructure during the CDMA era, ranking third in a mature market, so we could not overcome market dynamics without changing the paradigm of how we compete.
We also provide VoLTE, so that customers feel that LTE truly is a generational step beyond 3G. Not only does this attract customers to LTE, it forces our competitors to shift the field of competition away from legacy technologies and to LTE, where we have the advantage.”
In the smartphone era, data has usurped voice as a user priority. This makes guaranteed high-speed data transmission of paramount importance. Therefore, we quickly established the first nationwide LTE network in South Korea, making us a first-mover instead of a fast follower in the brave new world of LTE. It also made the extensive 2G and 3G commitments of our competitors, which were once their advantages over us, into liabilities.” LG Uplus’ drive to establish a 4G network had turned 2G and 3G into major obstacles for the rest of the market’s development.
Facing such strong competitors, what was LGUplus’s strategic plan? Sun Tae Kim claimed that we have built a nationwide network by concentrating on LTE only, whereas our competitors have focused on more localized deployments of hotspots or Wi-Fi. We also now provide twice the data capacity (twice the data cap) that our competitors do. We also provide VoLTE, so that customers feel that LTE truly is a generational step beyond 3G. Not only does this attract customers to LTE, it forces our competitors to shift the field of competition away from legacy technologies and to LTE, where we have the advantage.”
With Huawei’s technology and implementation, LGUplus managed to establish a complete network within only eight months. Crucially, they managed to attain consistency in the user experience – accessibility of LTE was the same no matter which corner of Seoul you found yourself. As a result of ubiquitous quality connections, LGUplus quickly gained supremacy over the market.
In order to keep strengthening its competitive advantage, in July 2013 – with the help of Huawei – LGUplus brought even greater user experiences to their customers via the commercial network deployment of enhanced LTE-A, which further improved mobile communication network performance. Consequently, the user growth rates of LTE surpassed their competitors and the ARPU started to substantially increase.
Staying ahead of the competition was not the only goal. According to Sun Tae Kim, “The LG Uplus vision is to provide freedom of communication to customers, rather than services centered on simple network functions. LG Uplus aims to change customers’ lifestyles by providing them new value. We will do that by doing away with the old value chain and creating value through converged, differentiated services that leverage both our fixed and mobile (LTE) infrastructure. We will also be a pioneer in the enterprise market.”
The strength of the LTE-A commercial network provided a strong basis for LGUplus’s vision. After improving network capability, LGUplus became more agile which immediately added value to customers’ experience. To satisfy the need for instant high-quality video, for example, LGUplus provided a multi-screen live HD broadcasting service, which became popular practically overnight. The service attracted more than five million users in 2013 when it first launched. Moreover, LGUplus provided full HD mobile terminal business, and supported 4-screen interaction. LGUplus also provided real time 3D maps that could not only give rapid route advice and real-time road condition information, but could also let you track other users’ live locations. LGUplus also provided a gaming-on-demand service, so users could easily experience TV-like game quality on mobile devices.
As a result of LG Uplus’s service enhancements, the operator established itself as a force to be reckoned with in the competition for market share. By the end of 2013, their customers’ average data consumption was increased by three times of that in previous years. The average traffic of an LG Uplus user was around 1.5 times than its competitors that demonstrated the advantage of its new network. Since 2014, their ARPU and newly gained market share has been number one among the top three Korean carriers. Its network gained the title of “Best LTE-A commercial network in East Asia”. In the 2015 Korean national operator test, its network performance in Seoul ranked number one. By sticking to the strategy of “technology leads to high speed and better experiences” LG Uplus was able to successfully win this battle for market supremacy in Korea.
Therefore, we quickly established the first nationwide LTE network in South Korea, making us a first-mover instead of a fast follower in the brave new world of LTE. It also made the extensive 2G and 3G commitments of our competitors, which were once their advantages over us, into liabilities.”
When talking about the future vision, Sun Tae Kim states, “LG Uplus will
remain open to creating value for customers in order to realize a number
one global position in Beyond Communication, taking the lead in our own
market and preparing for the future before all others.”
Currently LGUplus is working with Huawei to develop 5G technology – the future looks promising.Learn More