5G regulation and law in South Korea

According to the Ministry of Science and ICT (MSIT), the number of subscribers who use 5G mobile communication service using the 3.5GHz band surpassed 33.85 million as of May 2024, which means that 65.4% of the country’s population was using 5G-based services.

The growth of 5G subscriptions in South Korea has been substantial since thes introduction of 5G in 2019, but the rate of increase has been slowing recently. For instance, the number of 5G subscribers increased by 1.3% from July to August 2023, but this growth slowed to 0.7% from April to May 2024.

The South Korean government has made significant strides in expanding 5G coverage nationwide. In April 2024, the MSIT announced that South Korea had achieved nationwide 5G coverage. The three major telecommunications companies, SK Telecom (SKT), KT Corporation (KT), and LG Uplus (together, the Big 3) have individually built their 5G networks in 85 city administrative districts and some towns and villages, and a joint 5G network has been completed in rural areas, including farming and fishing villages.

This comprehensive approach has allowed South Korea to maintain its position as a global leader in 5G technology deployment and adoption, with nationwide coverage achieved in a relatively short period since initial commercial launch.

As of 2024, KT is the only telecom provider in South Korea to have established a nationwide 5G SA network. KT launched its SA 5G service in 2021, becoming the first South Korean operator to do so.

SK and LG U+ are operating their communication networks based on 5G NSA (Non-Standalone). Among these, SK Telecom has limitedly introduced 5G SA (Standalone) for business-to-business (B2B) purposes at SK Hynix factories.

Since the MSIT allocated 4.7GHz and 28GHz bands to the Big 3 and non-telecommunications companies in 2022, the government has been actively promoting private 5G networks for enterprises.

As of February 2024, the South Korean government has made significant progress in ensuring a wide range of operators and industrial companies have access to 5G frequencies. MSIT has allocated private 5G frequencies (100MHz in the 4.7GHz band and 600MHz in the 28GHz band) to 56 locations across 35 companies. This allocation strategy aims to support enterprises' digital transformation efforts across various sectors. 1

In 2018,the Big 3 participated in a public 5G spectrum action to award spectrum licenses and acquired a total of 2680 MHz, including 280 MHz (3420 ~ 3700 MHz) in the 3.5 GHz spectrum and 2400 MHz (26.5 ~ 28.9 GHz) in the 28 GHz spectrum. However, in 2022, the MSIT assessed the Big 3’s compliance with the network building requirement (a condition for spectrum licenses) and found that the Big 3 significantly underperformed in building 28GHz base stations. Consequentially, the MSIT canceled the 28GHz spectrum license for KT and LG Uplus while reducing SKT’s license period by 10% (6 months). In 2024, a new auction was held for the 28GHz spectrum license, which was won by a company called Stage X.

Stage X was awarded the bid based on the following criteria:

1. Market Innovation: As a new entrant into the telecommunication market, Stage X was committed to boosting the 5G network service.
2. Highest Bid: Stage X offered the highest bid of KRW 430.1 billion (USD 322.1 million).
3. Technical Capabilities: Stage X demonstrated the ability to deploy and operate a 5G network using 28GHz spectrum.
4. Rollout- Commitments: Stage X agreed to deploy 6,000 base stations nationwide within the first three years.
5. Interference Management: Stage X committed to implementing measures to address frequency congestion and interference.

The duration of the spectrum license is 5 years from the frequency allocation, and the MIST imposed  the following requirements on the winning bidder:

• The winning bidder must build out 6,000 base stations nationwide within the first three years.
• The winning bidder must pay KRW 43.01 billion, which is 10% of the frequency allocation fee and submit all the relevant documents* within the proposed timeline 
    
  *The documents include: (1) receipt for payment of frequency allocation fee, (2) certificate of deposit for share capital (proof of capital contribution), (3) corporate registration certificate, and (4) a pledge letter jointly written and submitted by major shareholders with 5% or more stake at the time of frequency allocation application (This includes provisions prohibiting arbitrary changes in constituent shareholders to ensure that the corporation at the time of frequency allocation application matches the actually established corporation, and stating that each constituent shareholder must adhere to the funding plan specified in the allocation application documents)

The 2024 auction started at a base price of KRW 74.2 billion (approximately USD 55.7 million), and the big was awarded to the highest bidder (Stage X) after multiple rounds of a competitive bidding process. Stage X won the auction with a bid of KRW 430.1 billion.

(Note: However, Thet MSIT recently revoked Stage X’s license as the country’s fourth mobile operator. This decision was made due to Stage X's failure to meet certain requirements because Stage X failed to raise the fully required paid-in capital of KRW 205 billion, and there were discrepancies in the ownership ratios of major shareholders compared to what Stage X had stated in the frequency allocation application. As a result, the MSIT finalized the license cancellation process and refunded the KRW 43.01 billion  that Stage X had paid for  frequency allocation. Stage X insisted that the government’s move was unfair and stated it would take necessary legal and administrative steps. After this incident, the MSIT has formed a research team to discuss ways to improve the frequency allocation system.)

The MSIT announced the 2024-2027 Republic of Korea Spectrum Plan on September 1, 2024. The plan demonstrates the government's strategic approach to managing frequency resources, considering the evolving needs formobile communications technologies and the transition from older generation networks to 5G and beyond. Some key points of this plan are:

• Securing up to 378 MHz of new spectrum for mobile communications, which will be achieved by reviewing the usage of frequencies currently allocated for other purposes, considering interference issues, and implementing shared use and band reorganization.
• No additional 5G spectrum will be supplied in 2024-2025, and the decision to supply additional 5G spectrum will be made in conjunction with the reallocation of 3G and 4G frequencies expiring in 2026.
• Detailed plans for reallocation will be developed and announced as follows: (1) for 3G and 4G frequencies expiring in 2026, plans will be announced by June 2025, and (2) for 5G frequencies expiring in 2028, plans will be announced by November 2027.

There are no specific laws related to general 5G.

However, regarding 5G private networks, the subordinate regulations of the Telecommunications Business Act and the Radio Waves Act were amended in 2021 to establish a system that allows for the allocation of frequency and provision of wireless communication services for 5G private networks through a relatively simplified procedure. As a result, companies other than existing Mobile Network Operators (MNOs), such as Naver Cloud and LG CNS, were also able to receive frequency allocations.

Recent amendments to the Telecommunications Business Act in South Korea have established a permanent MVNO Wholesale Provision Obligation System. This system requires mobile operators to lease their 5G networks toMVNOs at wholesale prices.

The MVNO Wholesale Provision Obligation System was initially introduced in 2010 as a sunset clause, requiring the leading mobile operator (SKT) to share its network with MVNOs. Due to the smaller size and weaker negotiating power of MVNOs, the government had been negotiating wholesale prices with SKT on behalf of those operators KT and LG Uplus leased their networks to MVNOs at similar rates. However, the obligation system was terminated in September 2022, and there was no wholesale price renegotiation in 2023.

After ongoing discussions, Article 38 of the Telecommunications Business Act was amended in December 2023 to make the MVNO Wholesale Provision Obligation System permanent. This change aims to ensure continued access for MVNOs to mobile networks at fair wholesale prices, promoting competition in the mobile telecommunications market. As a result, for the first year under the new system, the MSIT will continue to negotiate wholesale prices on behalf of MVNOs, and after this initial period, the system will transition to a post-regulation model where MVNOs will have to directly negotiate prices with the Big 3.

The rules for granting competitors access to new 5G networks are the same as those detailed in the Telecommunications Business Act.

There are no official government regulations regarding the use of Chinese technology in providing 5G-based services, and the South Korean government has taken a relatively subdued approach, refraining from directly intervening in private telecommunication companies' operations.

However, it was reported that as of December 2018, LG Uplus was using Huawei equipment for some of its 5G networks, with 4,133 out of 5,804 nationwide 5G base stations operated by LG Uplus using Huawei technology, and the government encouraged LG Uplus to respond to the security concerns related to this matter through third-party inspection of Huawei source codes.

The Korean government is demonstrating a strong commitment to securing a leading position in 6G technology development and standardization, aiming to drive the advancement of future communication technologies through global cooperation. Key initiatives include:

• In 2023, the government announced 12 National Strategic Technologies to Lead the Technological Hegemony, which included 6G under “Next-Generation Communications.
• In November 2023, the  6G R&D Promotion Strategy was unveiled, outlining plans to invest KRW 440 billion won (approximately USD324 million) from 2024 to 2028 in five key areas: wireless communications, mobile core, wired networks, systems, and standardization.
• In February 2024, Korea participated in the Joint Declaration on 6G Principles at the 2024 MWC in Barcelona, along with 10 other countries including the United States.
• In October 2024, the 4th Basic Plan for Radio Wave Promotion was announced, detailing plans to identify and secure 6G frequencies based on candidate bands adopted at the World Radiocommunication Conference (WRC)-23.

Korean companies, including the Big 3 and manufacturers such as Samsung Electronics, are actively participating in international standardization activities for 6G. They are focusing on integrating AI technologies, improving energy efficiency, and developing new network architectures (e.g., non-terrestrial networks). These companies are also accelerating technology development through collaborations with global enterprises. Key company initiatives include:

• Samsung Electronics: Aiming for 6G commercialization by 2030, Samsung is developing AI-based nonlinear restoration reception technology, AI-based energy-saving technology, and next-generation Multiple-Input Multiple-Output (MIMO) antenna technology.
• SKT: Collaborating with NTT DOCOMO, Nokia Bell Labs, and others to develop AI-based base station radio transmission and reception technology for 6G. SKT has also been active in global 6G discussions, hosting sessions at events like the SK Tech Summit 2023
• KT: Partnering with Korea Aerospace Industries (KAI) to pursue a 6G Low Earth Orbit Satellite Project.
• LG Uplus: Demonstrated a full-optical transport network, a key network technology for the 6G era. This technology minimizes conversion between electrical and optical signals, reducing power consumption and enabling energy savings in data transmission.