"The advancement of Korea's mobile communications infrastructure has stalled. There are concerns over whether it can fulfill its role as the consolidation infrastructure in the age of artificial intelligence (AI)."
Korea Information Society Development Institute (KISDI) diagnosed the state of the domestic mobile communications infrastructure this way in a report on the 3rd titled "Key issues in advancing AI mobile communications infrastructure." For AI to be applied across daily life and industry, "AI communications infrastructure" is essential, but Korea is not prepared to move into 6G (sixth-generation mobile communications), raising concerns that "its value as a national strategic technology and industry could be damaged."
According to the industry on the 24th, SK Telecom, KT and LG Uplus are lukewarm about advancing technology for both 6G and even 5G (fifth-generation mobile communications). The Lee Jae-myung administration, upon launch, pledged to enter the ranks of the "top 3 AI powers," presenting a goal of pilot 6G service in 2028 and commercialization in 2030. The strategy is to build an "AI-centric next-generation network" through this.
But since 5G commercialization, the three carriers have focused on filling their coffers by cutting capital expenditure (CAPEX) and research and development costs. The asset accumulated this way was used not for capital investment or technology development, but to deal with a series of recent hacking incidents. In this situation, the government submitted to the National Assembly a plan to reduce next year's budget for building an "AI-based open 5.5G convergence service test bed" from the existing 11.85 billion won to 7 billion won.
There are calls for the government to go beyond presenting "goals" such as introducing 6G and prepare policies that will spur investment by the three carriers. A telecommunications policy expert who requested anonymity said, "The domestic communications infrastructure, once rated among the best in the world, is seeing negative views emerge about advancement in the AI era," and added, "A plan for allocating spectrum resources that can spur capital investment competition among carriers needs to be prepared."
◇ China building out 5.5G nationwide… "Korean communications will struggle to use AI"
While the three domestic carriers remain passive about building AI communications infrastructure, Chinese carriers already commercialized 5.5G service in 100 cities last year. With speeds 10 times faster than 5G, 5.5G is called a bridge technology to 6G. As most of the currently discussed 6G requirements are based on 5.5G, this shows a will to prepare next-generation mobile communications technology in advance. In particular, the Chinese government recently announced the "Guidelines for building high-standard digital industrial complexes," also presenting a goal to build 200 integrated smart industrial complexes consolidated by 5.5G by 2027.
KISDI warned, "If the advancement of domestic mobile communications stalls at the current level, it will become difficult to develop and smoothly use AI services," adding, "Users' and industries' AI experience will decline, which could lead to a fall in national competitiveness."
◇ "Hacking incidents" drain carriers' coffers
According to the Financial Supervisory Service's electronic disclosure system, SK Telecom, KT and LG Uplus have steadily reduced their annual capital expenditure, which used to be about 9 trillion won, over the last three years. Last year, they executed only about 7.4342 trillion won. As of the cumulative third quarter this year, it stood at 4.3262 trillion won. At the current pace, the cumulative capital expenditure for this year is likely to fall below 6 trillion won.
The three carriers' cash and cash equivalents rose from 4.9298 trillion won in the third quarter of 2022 to 6.6843 trillion won in the third quarter of 2024. In the third quarter of this year, it was tallied at 5.8047 trillion won, down 1.2237 trillion won from the previous quarter, and this is unrelated to building next-generation communications infrastructure. SK Telecom, KT and LG Uplus all failed to prevent hacking incidents this year, and accordingly allocated the cash they had piled up to marketing expenses such as customer compensation.
◇ 5G SA adopted in 43 countries, but not commercialized in Korea
The current nationwide domestic network is built mainly on 5G non-standalone (NSA). 5G NSA is a half-5G technology that uses a 4G (LTE) core network and a 5G radio access network. It spread after being unusually adopted into the standard, unlike during 3G and 4G, to enable early commercialization of 5G. By contrast, 5G standalone (SA) refers to implementing mobile communication services solely with 5G technology without 4G network support. The communications technology that improves the performance of 5G SA is 5.5G.
SK Telecom and LG Uplus are not pushing for a transition to 5G SA, let alone 5.5G, citing low utility relative to investment. Currently, KT is the only one to have built 5G SA on a nationwide basis. However, it is applied only to voice over new radio (VoNR), and specialized 5G SA services such as network slicing have not been rolled out. In the case of SK Telecom and LG Uplus, they possess core 5G SA technologies, but commercialization has not occurred because they have not executed infrastructure investment.
The 3rd Generation Partnership Project (3GPP), a global mobile communications standardization collaboration organization, plans to establish "Release 21," which defines 6G technical standards, in 2028. Jang Kyung-hee, professor in the Department of Electronic Engineering at Inha University and executive director of the 6G Forum, said, "6G standardization is being discussed on the premise of 5G SA, but in Korea it is effectively not commercialized," adding, "With neither 5.5G nor even 5G SA implemented, concerns about Korea's 6G are significant." Implementing 6G is highly likely to include 5G SA technologies such as network slicing, and Jang's analysis is that commercialization of 6G is impossible with the domestic communications infrastructure centered on 5G NSA.
Meanwhile, overseas, infrastructure advancement for 5G networks is progressing actively. 5G SA has now been adopted in 43 countries worldwide. In particular, in major countries such as the United States, China, Japan, the United Kingdom, France and Germany, two or more operators are introducing 5G SA as they prepare for the 6G era.
◇ "At their current state, the three carriers cannot implement 6G"
Next-generation communications such as 5.5G and 6G are the foundational facilities that consolidate computing infrastructure implementing AI and users (robots, vehicles, drones, etc.). Accordingly, technological advancement such as higher upload speeds and reduced latency is required in the current download-centric communications infrastructure. According to market research firm Omdia, AI will account for 62% of total traffic in 2033. With the current domestic 5G allocating more time to downlink, there are limits to improving the uplink coverage and speeds required in the AI era.
To implement 6G, carriers must also boost their own AI capabilities. Professor Jang Kyung-hee said, "The biggest difference between 6G and 5G is that AI technology is reflected across all communications networks," adding, "Since AI is not introduced only in certain segments, possessing core technologies will be essential for implementing 6G."
The three carriers spent only ▲731.5 billion won in 2022 ▲737.2 billion won in 2023 ▲747.1 billion won in 2024 on research and development to secure AI capabilities. As of the cumulative third quarter this year, they executed only 661.3 billion won, remaining at a similar level to the past three years.
A university professor who requested anonymity said, "After ChatGPT emerged, the three carriers also chose AI as a future growth engine, but judging by research and development spending, they have effectively reduced investment," adding, "Instead of securing their own technological capabilities, they are relying on overseas corporations for AI service domains." The professor continued, "Without core AI technologies, the market could become subordinate." SK Telecom, KT and LG Uplus are working with global big tech firms such as Amazon Web Services (AWS), Perplexity, Microsoft and Google to address the lack of AI technologies.