Strategy Analytics: AR and VR drive LG Uplus’ 5G service differentiation

LG Uplus’ 5G market share is nine percentage points higher than its overall retail market share in South Korea, thanks to its emphasis on AR and VR content. Strategy Analytics’ latest research report, “LG ​​Uplus Seeks 5G Differentiation Through AR and VR Service Portfolio,” concludes that in a highly competitive market where it is difficult to differentiate network quality and price, operators have successfully used AR and VR content as a compelling use case for B2C 5G services and as a unique content source to drive user purchases.

Key findings from the report include:

In Q2 2019, each 5G user in South Korea used an average of 24GB of data per month, while 4G used 9.5GB and 3G used only 0.5GB.

AR and VR services accounted for 20% of 5G network traffic, while immersive video proved to be an important service - demonstrating that users are getting more than just faster download speeds when upgrading to 5G.

LG Uplus aims for nationwide 5G coverage by the end of 2022. For indoor coverage, in order to provide a quality AR and VR user experience, the number of 5G base stations is expected to need to be 1.5 to 2 times the number of 4G base stations.

David MacQueen, Executive Director at Strategy Analytics, noted, “LG ​​Uplus is not unique in showcasing AR and VR content for 5G, but it has made a commitment that goes beyond its competitors. The company has created some truly unique content through its investment in a volumetric video capture studio, and has built a broad content offering that enables it to target multiple customer segments. LG Uplus has also resorted to bundling hardware to drive adoption of the service.”

Kevin Nolan, Vice President of User Experience Innovation Research at Strategy Analytics, added: “We were impressed by the professional quality of the content and the variety of experiences on offer. AR and VR content will need to be constantly refreshed to keep users coming back to the services, so a continued push in content production and acquisition will be key to generating long-term appeal and repeat consumption.”

Phil Kendall, Executive Director at Strategy Analytics, added: “In markets like South Korea, where many 4G users are satisfied with their service experience and do not feel the need to upgrade to 5G to gain a better network experience, operators must develop relevant service-based marketing stories for 5G. VR and AR content is well suited to South Korea’s cultural and sports preferences and will perform well among user segments in other markets that have a strong connection to celebrities or social media stars.”