▪ The Korean government’s ICT funds include two primary components: the Broadcasting Communications Development Fund, established under Article 24 of the Framework Act on Broadcasting Communications Development (“Broadcasting Development Fund”), and the Fund for Promotion of Information and Communications, as defined in Article 41 of the Information and Communications Technology Industry Promotion Act (“Information Promotion Fund”).
▪ The ICT sector fund in 2024 is set at KRW 2.6324 trillion, which signifies a reduction of KRW 411.1 billion (13.5%) compared to 2023.
▪ The 2024 reduction in ICT sector funding is attributed to a significant 48.8% year-on-year drop, amounting to KRW 871.1 billion, in ‘considerations for frequency assignment,’ which is a primary revenue source for both funds.
▪ Revenue from considerations for frequency assignment tends to vary greatly year-to-year, influenced by whether there are new assignments.
▪ In 2018, the Ministry of Science and ICT (MSIT) allocated 5G frequencies in the 3.5 ㎓ and 28 ㎓ bands to three mobile carriers.
▪ In 2022, the MSIT completed a three-year post-assignment performance review of the 5G frequency allocations.
▪ As a result of the performance review, the MSIT revoked the 5G 28 ㎓ band frequency assignments from KT and LGU+ in December 2022, and from SKT in May 2023.
▪ Initially, the MSIT intended to reassign the 28 ㎓ band frequency after its assignment period ended in 2023. This plan was, however, scrapped following the dismissal of all three mobile carriers from the assignment.
▪ Following the cancellation of the 28 ㎓ band assignment to the three mobile carriers, which precluded reassignment, the MSIT is exploring options to allocate frequencies to new operators beyond these carriers.
▪ Despite the government’s Intelligent Network Construction Strategy (Dec. 2017) aiming for a nationwide 5G network by 2022, this target was not reached.
▪ Korea’s status as a network powerhouse has diminished, now ranked sixth in Kearney’s 5G Readiness Index of 33 countries with 5G commercialization.
▪ With an increase in 5G subscribers, the high pricing of 5G plans relative to service quality is leading to increased telecom expenses for consumers.
▪ Post-5G commercialization, the operating profits of the carriers have risen, while their capital expenditure has not seen a significant increase.
▪ In May 2023, the Fair Trade Commission (FTC) found that the 5G service speed advertisements by the three mobile carriers were unfair, leading to the imposition of corrective actions, orders for public announcements, and fines.
▪ Currently, three consumer civil lawsuits are ongoing against these carriers at the Seoul Central District Court for their misleading advertising practices. These include two cases of unjust enrichment and one for damages.
▪ The decision not to reassign the 28 ㎓ band to the three mobile carriers in 2023 means missing out on the initial 25% lump sum payment, leading to a shortfall in ICT sector fund revenues for this year and the next five years.
▪ The withdrawal of the three mobile carriers from the 28 ㎓ bands might hinder the development of high-frequency band utilization services and equipment industries. This is particularly concerning as the 5G 28 ㎓ equipment and terminal ecosystem, currently in its nascent commercialization stage, is expected to grow post-2025.
▪ Many research institute analyses suggest that a 28 ㎓ network is essential for delivering ultra-high-speed 5G services. Therefore, canceling the 28 ㎓ frequency assignment in Korea could restrict leveraging the unique capabilities of 5G technology.
▪ With the anticipated utilization of ultra-high frequency bands in the forthcoming 6G era, the expertise and technology developed through 28 ㎓ applications are crucial. The lack of progress in these areas might hinder preparations for the transition to 6G.