The S.Korean electronics giant has picked the private 5G service as one of its next B2B growth engines
Source: The Korean Economic Daily
LG Electronics Inc.‘s push to expand its presence in the burgeoning private 5G network market in the era of digitalization and artificial intelligence transformation is set to gain traction.
The South Korean electronics giant announced on Sunday that it will build its private 5G network at Seoul Station and Korail Siheung Train Depot in Gyeonggi Province to lead digital transformation at the facilities with real-time monitoring of the facilities and locomotives and a digital twin technology.
It also vowed to discover new business models, using the local 5G network services.
The announcement comes after the company signed a memorandum of understanding (MOU) with Korea’s state-owned railway operator Korea Railway Corp. (Korail) on Friday to build the e-Um 5G network, or the private 5G network, to innovate the national railway system.
e-Um 5G is a private 5G network that can be customized to different locations based on specific needs. It is a business-exclusive network service using 5G that can be accessed only via a certain business or organization’s devices or terminals.
THE PRIVATE 5G NETWORK MARKET IS SET TO BURGEON
The private 5G network service boasts ultra-high speed, ultra-low latency and highly reliable connectivity, key in the operations of smart factories, robot-driven logistics and hospitality services, and other various industrial automation systems.
Its global demand is set to grow rapidly following the development of future technologies including AI, big data, cloud, autonomous driving and augmented reality (AR).
The global 5G private network market is forecast to grow to $11.8 billion in 2028 from $2 billion in 2023 at an annual growth rate of over 40%, according to market research firm MarketsandMarkets.
LG Electronics has been accelerating its push to win the private 5G network race on expectations that the private 5G business will create great synergy with its other business-to-business (B2B) services and products such as automated mobile robots and automated guided vehicles mainly used in smart factories, logistics centers and hospitals.
The Korean company said it has successfully tested its 5G private network services at various sites at home, including a smart factory in North Chungcheong Province, a logistics center in Incheon and a university hospital in Seoul. It has also tested it at its smart factory in Tennessee in the US.
It owns about 30,000 patents on the related technology, according to the company.
SYNERGY WITH OTHER B2B BUSINESSES
LG Electronics has designated the B2B sector as one of its future growth drivers with a long-term plan announced in August at its Investors Forum to generate 45% of total sales from its B2B operations by 2030.
In July of 2023, LG Electronics Chief Executive Cho Joo-wan unveiled the company’s vision to achieve 100 trillion won ($71.5 billion) in annual sales by 2030 by transforming into a platform-based tech giant from a traditional home appliance maker.
The company earned 84.2 billion won in consolidated sales in 2023.
LG Electronics runs a wide range of B2B operations, including automotive electronics, heating, ventilation and air conditioning (HVAC) systems, built-in appliances, smart factory solutions, commercial displays and mobility solutions.
Of its four business units, Business Solutions is responsible for digital signages, commercial TVs, robots, EV chargers and information technology devices such as laptops and monitors.
It has also joined a race to win the chiller market, which is rapidly growing thanks to increasing demand for AI data centers.
The company set a goal of raising sales from the chiller business to 1 trillion won by 2027.
It inked a 100 billion won deal to provide the cooling machine to a data center in North America in the second quarter.
Its accelerated foray into the private 5G network market is expected to help the company offer more products and services in the B2B sector to smart factories, logistics centers and data centers as a turnkey solution.
“LG Electronics’ B2B business is not limited to single product supply,” said CEO Cho. “The company plans to pursue a sustainable growth of its high-value-added business that offers a customer an all-in-one service with diverse products for a special space.”
