Controversy Over Effectiveness of Yeo's First General Election Pledge 'Public Wi-Fi'

Although Collaboration with Telecom Companies Is Planned
Cost Burden Grows Amid 5G Investment Expansion
Legal Controversy Surrounds Local Governments' Self-Built Networks

[Image source=Yonhap News]

[Asia Economy Reporter Koo Chae-eun] The Democratic Party of Korea has announced the establishment of 53,000 public Wi-Fi spots nationwide as its final No. 1 pledge and core ICT pledge for the April 15 general election. While the industry and insiders regard it as unusual for an ICT-related pledge to be the top pledge of a ruling party, concerns have been raised about the heavy financial burden and the uncertain effectiveness and feasibility of the plan.

On the 27th, the Democratic Party promised to establish a total of 17,000 public Wi-Fi spots in 2020 and an additional 36,000 from 2021 to 2022 as their No. 1 pledge. This year, the focus will be on installing Wi-Fi in city buses, schools, and transportation facilities, and from 2021, the plan is to gradually expand support to vulnerable groups by installing Wi-Fi on 2,100 village buses, 27,000 bus stops, terminals, railway stations, public health centers, facilities for the disabled, social welfare centers, and local children's centers.

The funding is planned to be arranged through collaboration with telecommunications operators. The budget is estimated to be 48 billion KRW this year, 260 billion KRW in 2021, and about 270 billion KRW in 2022.

However, the effectiveness of the pledge is uncertain. Since the commercialization of 5G in April last year, the number of subscribers to unlimited data plans has increased significantly, making it difficult for public Wi-Fi to fully realize its cost-saving effect on communication fees. Currently, nearly 80% of 5G subscribers use unlimited data plans.

There are also issues that conflict with current laws. According to the Telecommunications Business Act, except for exceptions related to public safety, it is prohibited for public or private institutions without licenses to interconnect or mediate communication networks or provide services to the general public. A telecommunications industry official said, "If local governments build their own networks, there are legal issues," adding, "The cost of building private networks is enormous compared to their utility, which also needs to be considered."

There is also the issue of increasing cost burdens on telecommunications operators amid ongoing 5G investments. The plan to expand free Wi-Fi conflicts with reality as the three major telecom companies are making massive facility investments for 5G. In fact, the combined operating profit of the three telecom companies on a consolidated basis in the fourth quarter of last year was 654.9 billion KRW, down 8.11% year-on-year. The investment costs for 5G infrastructure have caused a decline in performance. Professor Shin Min-soo of Hanyang University's Business School said, "Both telecom companies and the government will have concerns about how to recover the money invested in public Wi-Fi," adding, "Telecommunication fee policies need to balance costs and revenues, and it is important to avoid leaning too much to one side."

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