100,000 Base Stations in the First Year of Commercialization... The Era of Nationwide 5G Network Accelerates

[Asia Economy Reporter Seulgina Jo] It has been revealed that the three domestic mobile carriers have installed nearly 100,000 5G base stations nationwide this year. The number of base station equipment, another measure of coverage (effective communication range), has also expanded to 230,000 units. This is due to the aggressive capital expenditure (CAPEX) expansion by the three carriers in the first year of commercialization in 2019. At this pace, it is expected that the government's original target for nationwide 5G network deployment could be advanced by 1 to 2 years.

◆ Completion of 100,000 base stations installed in the first year of commercialization = According to the Ministry of Science and ICT and the telecommunications industry on the 23rd, the number of nationwide 5G base stations (based on completion) is estimated to be around 100,000. The number of 5G base stations nationwide increased from about 60,000 in June last year to 94,407 by the end of November, and the upward trend has continued into the new year.

This is the result of the three carriers accelerating the installation of base stations, which requires large-scale investment, in the past year ahead of the '1st anniversary of 5G launch' in April. An industry official explained, "Compared to LTE, which built a nationwide network in less than a year after commercialization, the pace is relatively slower, but the frequency characteristics must be considered. Since 5G requires more base stations, each company has rolled up their sleeves for investment."

The number of equipment to be considered along with base stations is known to reach 230,000 units. Unlike LTE, 5G is directional, so coverage can vary depending on the number of equipment as well as base stations. This is why companies emphasize the number of base station equipment more than the number of base stations. Typically, one 5G base station is equipped with 2 to 3 pieces of equipment.

By company, KT had installed 76,633 base station equipment nationwide and activated 70,956 as of the 19th. LG Uplus, which planned 80,000 units last year, roughly achieved this target, and SK Telecom also exceeded its goal of 70,000 units. Combined, the three companies' nationwide 5G base station equipment approaches 230,000 units.

◆ Large-scale investment continues in the second year of commercialization = This result is also clearly reflected in the significantly increased capital expenditure by the three carriers last year. The estimated capital expenditure for 5G base station construction and related investments last year was about 3 trillion KRW for SK Telecom, 3.3 to 3.5 trillion KRW for KT, and 2 trillion KRW for LG Uplus, totaling around 9 trillion KRW.

The investment scale by each company has expanded by trillions of won compared to a year ago. An industry official explained, "Most of this can be considered costs for 5G base station construction." As of the third quarter last year, the disclosed capital expenditures for these three companies were 1.5779 trillion KRW, 2.0953 trillion KRW, and 1.7912 trillion KRW, respectively.

The aggressive investment trend in the telecommunications industry is expected to accelerate further this year, the second year of 5G commercialization. The three carriers collectively stated, "Following last year, we will focus on building a denser network. We will increase investment to build the 5G network."

At the current pace, there is also hope that the originally expected nationwide network deployment timeline, which was anticipated to be significantly delayed compared to LTE, can be brought forward. The Ministry of Science and ICT has set the completion of nationwide 5G network deployment by 2022. The industry expects this to be earlier, around 2020 to 2021.

This content was produced with the assistance of AI translation services.