The South Korean government laid out measures to enhance local competition in the communications market and break the over 20-year dominance of the country’s oligopoly of telecommunication operators, namely SK Telecom, KT Corp, and LG Uplus. The Ministry of Science and ICT said it plans to provide financial incentives to attract new operators including foreign companies for the 28 gigahertz(GHz) band of 5G network frequency.
New operators will be given priority to use 28 GHz frequency bands and one of the two 5G anchor bands of 700 megahertz or 1.8 GHz for five years. The government is set to lower the entry fees for the 5G frequency allocation below the current 207.2 billion won (US$ 158.3 million).
Under the new policy, the government will ease mandatory equipment installations for the new operators from the initial installment of 15,000 base stations per operator. It’ll also support up to 400 billion won (US$ 305.6 million) in loans via financial institutions and reduce the payment requirement of total investment costs to 10% from the initial 25% payment in the first year.
The policy follows President Yoon Seok-yeol’s calls in February to provide special measures to raise local competition among the three major telecom companies and prevent passing the financial burden onto the general public. Up until now, consumers had very few 5G mobile subscription choices. It was either the 10GB or less or the expensive 100GB or more one, without affordable intermediate rate subscriptions in between.
According to Statistics Korea, the average household telecom expenses during the first quarter of this year was 130,285 won (US$ 100), up by US$ 8 compared to three years ago. Meanwhile, the combined operating profits of Korea’s three major telecom companies during the first quarter exceeded 1 trillion won (US$ 76.5 billion) for the fifth straight quarter.
