South Korea’s Ministry of Science and ICT said on Wednesday that the chiefs of major telecoms SK Telecom, KT Corp., and LG Uplus pledged an investment of up to 25.7 trillion won (US$21.4 billion) for the development and expansion of 5G infrastructure in the country by 2022.
The move came after President Moon Jae-in presented the Korean “New Deal,” which pledged to pioneer future technologies and industries in the post-COVID 19 era. The investment from the nation’s leading telecommunications operators would align with the “Digital New Deal” policy to reinforce the country’s data, network, and artificial intelligence ecosystem.
During a meeting with ICT Minister Choi Ki-young, SK Telecom, KT Corp. and LG Uplus agreed to invest the amount in the next two years to boost the economy as the COVID pandemic hit the country’s exports and imports.
5G Infrastructure Expansion
Top executives from the telecoms stated they would concentrate on developing 5G networks in Seoul capital and six other cities this year. The development would include setting up 2,000 multi-purpose facilities, on Seoul Metro lines, and other major highways.
The telecom carriers would expand 5G connectivity to 85 districts, consisting of subways and all train stations, 20 new highways, and 4,000 facilities by next year. They would also act toward establishing a nationwide 5G network by the first half of 2022.
ICT Minister Choi told that the private sector and the government would collaborate to create 5G network infrastructure to bounce back from the crisis. The Ministry also stated that the collaboration would become the primary foundation of the Digital New Deal policy of the government, aiming to supply about 900,000 jobs by 2025.
The Digital New Deal policy would offer tax incentives to the participating telecom companies. SK Telecom, KT, and LG Uplus pursue to obtain provisional investment tax credits up to 10 percent.
Currently, the telecom companies enjoy a 3 percent maximum tax deduction for their 5G investments to decrease the load on the first domestic telecom companies to commercialize 5G services in April 2019.
SK Broadband Co., SK Telecom’s affiliate, would also take part in the venture.