5G Specialized Network Business Allowed Even When Foreign Ownership Exceeds 49%

Regulation Relaxation for Certain Types
Ministry of Science and ICT: "Promoting Investment Through Specialized Network Competition"

[Asia Economy Reporter Cha Min-young] The Ministry of Science and ICT announced on the 2nd that the amendment to the Enforcement Decree of the Telecommunications Business Act, which includes deregulation measures for 5G specialized network operators, was approved at the Cabinet meeting.

Specialized networks are 5G networks that can be used only in specific areas such as buildings and factories. They are customized networks specialized for services tailored to the individual purposes that demand companies want to introduce, such as smart factory construction.

This amendment to the enforcement decree contains provisions to ease regulations on certain types of operators to support the activation of 5G specialized network businesses.

Among the three types disclosed during the government announcement in January, deregulation will be limited to the second type (Type 2). The second type refers to cases where a demand company provides a specialized network for the demand company itself, its partners, and visitors, and the demand company registers as a telecommunications carrier.

The Ministry of Science and ICT explained, "Type 2 refers to cases where the main user, the demand company, directly builds and operates the 5G specialized network. Although it is a company that is not originally a telecommunications company, frequently applying telecommunications carrier regulations due to the construction and operation of the specialized network could hinder the activation of specialized networks, so we decided to ease the regulations."

Regarding business entry, ▲ companies with foreign ownership exceeding 49% can now register as telecommunications carriers for specialized network businesses. ▲ Conversely, the foreign ownership restriction has been abolished, allowing foreigners to own more than 49% of the company's shares. ▲ The criteria for exemption from M&A approval review, terms of use, and reporting obligations have been relaxed from annual sales of less than 30 billion KRW to less than 80 billion KRW based on the previous year.

The amendment to the Enforcement Decree of the Telecommunications Business Act, approved at the Cabinet meeting, will be promulgated and come into effect immediately after the President's approval.

Jung Chang-rim, Director of Telecommunications Policy at the Ministry of Science and ICT, stated, "We hope this deregulation will promote investments by operators through competition in specialized networks and lead to securing a global market advantage in the 5G B2B sector."

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