South Korea’s third-largest mobile operator, LG Uplus, has adopted a successful differentiation strategy through its augmented and virtual reality (AR and VR) service portfolio in the country’s highly-competitive 5G race, according to a report by Strategy Analytics, a global consulting firm.
According to the report released on Sept. 12, LG Uplus has a 5G market share of 29 percent, or 9 percentage points higher than its overall retail market share in South Korea, which is facilitated by a strong focus on AR and VR content.
In the report, a case study on LG Uplus’s 5G strategies and market execution identified VR and AR services, which require higher download speeds compared to conventional video, as demonstrating the power of LG Uplus’s new network and giving consumers reasons to upgrade.
In order to seed the market by letting users sample the unique services powered by a faster network, LG Uplus has been bundling VR headsets with selected plans.
Moreover, LG Uplus also offers its subscribers a range of VR and AR content, including Pro Baseball, Golf, Idol Live, AR Live and VR live, delivering an immersive 5G media experience to a range of consumers.
“The baseball app targets users in their 30s and 40s, while the golf app targets those in their 50s and 60s,”said Park Jong-wook, vice presidentin charge of the mobile service division at LG Uplus. “As the Uplus Idol Live app is designed to target those in their teens and 20s, we are setting up our business portfolio to encompass a wide range of generations,” he added.
According to a consumer survey conducted in June by Kantar Korea, the ratio of choosing Uplus for the company’s competitive 5G services (including AR and VR) was two to three times higher than that of its competitors.
Phil Kendall, Executive Director at Strategy Analytics, said, “In markets like South Korea, where many 4G users will be happy with their service experience and not feel any need to upgrade for a better network experience, operators must develop a service-based marketing story around 5G.” He explained that VR and AR content fit South Korean cultural and sporting interests well and will “work well in other markets in those customer segments with strong affiliations to celebrities or social media stars.”
The report concludes that, in a highly competitive market where differentiation on network quality and pricing is difficult, the LG Uplus operator has successfully used AR and VR content both as a compelling case for business-to-customer 5G services and as a source of exclusive content driving customer acquisition.
LG Uplus launched its 5G network in early April along with local competitors KT and SK Telecom, and has 540,000 5G customers to date. In cooperation with Huawei, the leading 5G provider, it has delivered more than 25,000 5G base stations across the country. The two companies have been working together to develop ultra-HD video and VR services based on 5G networks and to enable new 5G commercial applications.
According to a recent report from RootMetrics by IHS Markit, LG Uplus’s 5G network stood out with the most consistent speed performance among all South Korean mobile operators.