5G regulation and law in South Korea

This chapter was kindly submitted by Yulchon LLC

According to the Ministry of Science and ICT (“MSIT”), the number of subscribers who uses 5G mobile communication service using the 3.5GHz band surpassed 25 million as of July 2022. This means that one in two Koreans was using the 5G-based services. Also, the 5G subscribers accounted for 33% of all mobile communication subscriptions, and 72.4% of the overall online traffic.

However, in 2022, 44% of all 5G wireless base stations were concentrated in metropolitan areas. For instance, in Seoul, the necessary number of wireless base stations required to cover 1.4 square kilometers was 432, but the actual number of wireless base stations was 37,055. However, in other provinces, the number of wireless base stations was far less than the minimum number of wireless base stations required to cover relevant regions.

Local telecom operators have not yet managed to monetize their 5G investments.

5G plans are slightly higher-priced than 4G plans. In a Korea Consumer Agency survey of 5G plan subscribers in May 2020, 48.5% (388 people) of the respondents said they found 5G plans expensive. For this reason, as of 2022, various flexible plans, targeting different generations by optimizing their needs (e.g., price, data volume, etc.), have been introduced to customers.

South Korea considers 5G as the cornerstone of the Fourth Industrial Revolution. On November 24, 2020, the MSIT hosted a 5G+ working-level committee to encourage 5G-based B2B technology.

The MSIT designated ten core 5G-based industries: network equipment, next-generation smartphones, VR and AR devices, wearable devices, intelligent CCTV, future drones, connected robots, vehicle-to-everything (V2X) communication, data security, and edge computing. In addition, the following services were identified as the five core 5G-based services: extended reality (XR), smart factory, autonomous vehicle, smart city, and digital healthcare.

In 2022, the MSIT allocated 4.7GHz and 28GHz bands to SK Telecom (“SKT”), KT Corporation (“KT”), and LG U+ (together, the “Big 3”), and non-telecommunications companies to provide 5G services in connection with autonomous driving, smart factory, XR, digital healthcare, etc. The network system created by these non-telecommunications companies is called a “5G specialized network” or “joint 5G (yi-umm 5G)”.

To award spectrum licenses, a public 5G spectrum auction took place on 18 June 2018, and the Big 3 participated in the auction.

The government made available 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.

• For the 3.5 GHz spectrum, SKT acquired 100 MHz, KT acquired 100 MHz, and LG U+ acquired 80MHz. The license period is for 10 years from December 1, 2018.
• For the 28 GHz spectrum, each of the Big 3 secured 800 MHz, and the license is for 5 years from December 1, 2018.

The MSIT obligated the Big 3 with the following network building requirements:

• Build 22,500 base stations on 3.5GHz within 3 years from the spectrum assignment, and a total of 45,000 base stations by the end of 2023.
• Build 15,000 equipment on 28GHz by the end of within 3 years.

The Big 3 paid similar prices in the tender, although some variation may have occurred due to the clock auction and price selection methods. Officials wanted to avoid the previous “winner-takes-it-all” structure to enable operators to commercialize 5G on an equal footing.

While some argue that the tender became “less meaningful” in that the spectrum amount and price allocated to the Big 3 have not changed much, new policies such as imposing a spectrum cap to prevent excessive costs from being passed onto end-users and changes in the tender methods seem to have been effective.

The Big 3 paid KRW 3.6183trn in total in the clock auction tender: SKT (KRW 1.4258trn), KT (KRW 1.1758trn), and LG U+ (KRW 1.0167trn). The process divided the spectrum into blocks, allocating the spectrum amount and range for each operator based on a two-step system. The details of the calculation method were not disclosed.

On December 5, 2019, the MSIT’s 5G+ Strategy Committee announced a mid- and long-term plan called “5G+ Spectrum Plan”. Some key ideas of this plan are:

• Use unlicensed spectrum for 5G
• Secure the world’s largest 5G spectrum
• Accelerate innovation in spectrum management, regulations, and systems

In February 2022, the MSIT held the 5G+ Strategy Committee again to assist 5G service operators and to further promote 5G-based services to the public sector. Also, the committee decided to develop 5G-based integration services (e.g., innovative solutions for factories, shipyards, robots, etc.).

There are no 5G specific rules yet.

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 satisfied the network building requirement for 3.5GHz, but significantly underperformed on building 28GHz base stations. Consequentially, the MSIT canceled the 28GHz spectrum license for KT and LG U+ while reducing SKT’s license period by 10% (6 months). However, if SKT fails to build 15,000 base stations for 28GHz by May 31, 2023, the MSIT may cancel SKT’s license as well.

Some parts of the Telecommunications Business Act cover 5G network and spectrum sharing.

Mobile operators must provide mandatory wholesale services to MVNOs under the Telecommunications Business Act. Since 2020, the Big 3 have been sharing 5G networks to MVNOs at wholesale price.

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

There are no official government regulations regarding the use of Chinese technology in providing 5G-based services, and some equipment used for wireless base stations are Chinese products.