Among the 'Three Major Telecoms,' Only LG Uplus Increases Facility Investment... 5G Network Quality Remains a Challenge

Total Q1 CAPEX of 3 Major Telecoms
830 Billion KRW... Over 20% Decrease YoY
Industry Says "Should Be Viewed as Annual Investment Scale"

The three major mobile carriers

[Asia Economy Reporter Cha Min-young] Among the three domestic mobile carriers in the first quarter of this year, LG Uplus was the only one to increase its capital expenditure (CAPEX).

According to the telecommunications industry on the 13th, the total CAPEX of the three mobile carriers in the first quarter was approximately 834.4 billion KRW, a decrease of more than 20% compared to the same period last year. SK Telecom, the leading company, recorded 165 billion KRW, down 46.2% from the previous year, and KT spent 289.4 billion KRW, down 28.9%. Only LG Uplus executed 380 billion KRW, an increase of 1.4% compared to the previous year.

This means that network equipment investment has decreased amid ongoing consumer complaints about 5G network quality. Although it has been three years since the commercialization of 5G in 2019, there are complaints that users cannot feel the fast communication speeds corresponding to the higher 5G plans. Collective lawsuits, such as those by 5G victims' groups, have also emerged.

According to the Korea Radio Promotion Association and others, the number of mobile communication base stations remains stagnant. As of the first quarter, the number of domestic mobile communication base stations was about 1.46 million, which is 20,000 fewer than the fourth quarter of last year and 50,000 fewer than the second quarter of last year (1.51 million). It is observed that the speed of reducing 2G wireless networks is faster than the investment speed in 5G networks.

Judging that there is no practical benefit to the future-oriented 5G 28 GHz band, the three carriers have generally failed to accelerate the construction of base stations. Although the three companies promised to build a total of 45,000 base stations, 15,000 each, after being allocated frequency bands this year, it is expected that the actual number will fall far short of this target.

The telecommunications industry states that since the first year of 5G commercialization in 2019 required significant CAPEX, a reduction in investment compared to 2019 is inevitable. However, SK Telecom has stated in a conference call that it plans to maintain this year's CAPEX at the same level as in 2020.

An industry official explained, "CAPEX is usually calculated on an annual basis, and investments are typically concentrated in the fourth quarter. Last year's first quarter was an exception, with significant spending due to COVID-19 and other factors, making the decrease appear larger."

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