The communication policy pledges presented by Lee Jae-myung, the Democratic Party of Korea candidate, and Kim Moon-soo, the People Power Party candidate, include ① commercialization of 6G (sixth generation mobile communication) by 2030, ② establishment of fair network usage fees, and ③ cost reduction in communication expenses through the activation of budget phones.
◇ 2030 commercialization of 6G pledge… AI-focused challenges in the telecommunications industry
Examining the communication policy pledges of the two main presidential candidates announced by the 29th, both aim for 6G commercialization by 2030. This mirrors China's plan to pursue the world's first 6G technology commercialization. Korea previously achieved the world’s first 5G (fifth generation mobile communication) commercialization in 2019.
With 6G, communication speeds can reach up to 1Tbps (terabit per second). This allows the transfer of 125 gigabytes (GB) of data in just one second, increasing communication speed up to 50 times faster than 5G. The speed of generative artificial intelligence (AI) like ChatGPT will also be faster than now, making 6G a crucial infrastructure for the development of the AI industry.
However, the 2030 6G commercialization pledges of the two main presidential candidates are not welcome news for the telecommunications industry, which is more focused on AI businesses rather than investing in 6G technology. Telecommunications companies have returned the less profitable 5G 28㎓ frequency and have been providing a partial 5G service. Even six years after the commercialization of 5G, they are criticized by consumers for not meeting expectations in speed and quality, while infrastructure investments continue to decline. Last year, SK Telecom's capital expenditure (CAPEX) was 1.544 trillion won, down 11.4% from the same period the previous year. During the same period, KT's CAPEX decreased by 4.6% to 2.2999 trillion won, and LG Uplus recorded a 24% drop to 1.9 trillion won.
China has already established a 5.5G (5.5th generation mobile communication) network that is 10 times faster than 5G for its 2030 6G commercialization, but domestic telecom companies are often criticized for only presenting vague blueprints for the 6G era. Yul-sang Lee, Head of Team at the Institute for Information & Communications Technology Planning & Evaluation, said, “The international 6G standards will be set in 2028. To accelerate the speed of 6G commercialization, we must develop and propose as many technical standards as possible, and as many need to be selected.” He added, “For this, proactive technology development investments by telecom companies are essential.”
◇ Establishment of “fair network usage fees”
Both main presidential candidates emphasized the establishment of fair network usage fees. Kim Moon-soo of the People Power Party stated that while prioritizing the autonomy of private contracts for network usage fees, he would regulate unfair practices post hoc. Lee Jae-myung of the Democratic Party of Korea also pledged to institutionalize fair network usage contracts.
Domestic telecom companies have criticized global content providers (CP) like Google for avoiding paying network usage fees despite accounting for a significant portion of internet traffic. This criticism from the telecommunications industry seems to have been accepted by both main presidential candidates. According to the Ministry of Science and ICT, Google accounted for 31.1% of the average daily generated traffic in Korea last year. Combined with Netflix (4.88%) and Meta (4.39%), it exceeds 40%.
However, it is uncertain whether the pledges of the two main presidential candidates will be implemented due to concerns about trade friction with the United States. Recently, the U.S. Trade Representative (USTR) referred to the legislative discussions in Korea, which included burdens of network usage fees on foreign CPs, as a “non-tariff barrier” discriminating against U.S. corporations. Sang-jung Ahn, an adjunct professor at the Chung-Ang University Graduate School of Communications, said, “American companies like Disney and Amazon also have agreements with domestic telecom companies to pay network usage fees, but only Google is holding out.” He added, “The USTR's claim that it discriminates against U.S. corporations lacks persuasiveness, given that other American companies are paying network fees. There should be no disruption in implementing the pledges.”
Heung-jong Kim, a special professor at Korea University, noted, “Europe has shown a stern stance on imposing network usage fees on big tech corporations in the U.S., which is the recent global trend.” He added, “While it is true that implementation of the pledges is uncertain due to trade issues, it will at least aid domestic telecom companies in increasing their bargaining power when negotiating network usage fees with U.S. corporations.” Recently in Germany, Deutsche Telekom filed a network usage fee lawsuit against Meta and won, with the court recognizing the right to claim usage fees for providing telecom networks.
◇ 'Budget phone activation' for communication cost reduction
In this presidential election, budget phone activation has inevitably emerged again as a measure to reduce communication costs. However, the specific methods for activating budget phones differed between the two candidates.
Kim Moon-soo pledged to revive pre-regulation of wholesale network usage fees abolished in March this year. This aligns with the budget phone industry's claim that reducing wholesale network usage fees is essential to lowering rates. The wholesale network usage fee is the expense for renting the telecom network of mobile network operators (MNO) by budget phone companies. The government negotiating network usage fees with the three telecommunications companies on behalf of budget phone companies is seen as a way to lower network usage fees than the post-regulation method where each budget phone company negotiates wholesale network usage fees with the three telecommunications companies, and the results are reviewed by the government afterward.
Lee Jae-myung pledged to introduce the National Data Safety Plan (QoS). Recently, a pay-per-use budget phone plan offering 20GB for 10,000 won was launched under government initiative, but many consumers hesitate to subscribe due to the lack of QoS support, reflecting industry feedback. QoS is a system that allows users to continue using data at a limited speed without additional charges even after using up the basic provided amount, which is implemented by the three telecom companies. While QoS is provided for flat-rate budget phones that resell plans with the same configuration at a lower price than mobile network operators, it is not supported for pay-per-use budget phones. For instance, if a subscriber on a 10,000 won plan uses all their allotted 20GB of data, an additional fee of 22.53 won per megabyte (MB) is charged.
Myeong-su Ko, chairman of the Korea Budget Telecom Association, said, “The pledges of both candidates will certainly help activate budget phones,” but added, “However, policies such as radio use fee reductions and expansion of used phones are essential for budget phone activation.” So far, radio usage fees have been waived for small budget phone companies, excluding subsidiaries of the three telecom companies. From this year, budget phone companies will have to pay 20% of radio usage fees, 50% in 2026, and the full amount from 2027.
Additionally, Kim Moon-soo pledged to mitigate the burden of communication costs by expanding the release of mid- to low-priced phones, improving the optional contract discount system, and notifying optimal billing plans. Lee Jae-myung announced plans to expand self-service phones, introduce tax credits on communication costs, establish a user-centered data utilization system that enables gifting or carrying forward unused data, and increase the discount rate on soldiers' communication charges from 20% to 50% to reduce communication costs.