[Galapagos K-Communication]② There Is No Innovative Figure Like Elon Musk

Telecom Experts on the 3 Major Carriers
"Value Must Be Created Through Telecom Infrastructure"
"Entering New Markets Requires Boldness and Urgency"

The telecommunications market is regarded as a market with great potential. This is because it can expand into various areas such as content, media, commerce, and mobility by using intangible frequencies as the connecting link for communication networks. While countries fought wars to claim land during the imperialist era, telecommunications companies continuously compete to secure frequencies. Those who hold the frequencies had the opportunity to lead the digital ecosystem. However, in reality, they lost that opportunity.

Kim Young-seop, CEO of KT, recently expressed self-reflection at a conference held in Seoul, saying, "While telecommunications operators were satisfied with building networks and providing communication services on top to earn profits, big tech companies became the owners of the digital ecosystem." Although money and time were invested in building communication networks, the ones who actually reaped significant benefits were companies with innovative ideas.

The name Elon Musk is synonymous with innovation. With tremendous drive, almost more of an adventurer than a manager, he is changing our lives and future. There is no need to look far. In Korea, startup founders such as Coupang and Woowa Brothers are achieving innovation on top of communication networks with their unique entrepreneurial spirit and are celebrating the results.

SK Telecom and LG Uplus, as subsidiaries of large corporations, find it difficult to show 'outstanding' moves within their inherently conservative cultures. KT, once a public enterprise, is also not free from political influence, making its governance structure always unstable. Professor Kim Yeon-hak of Sogang University pointed out, "IT companies that discover opportunities and grow in the digital transformation era commonly have a bold mindset that takes risks," adding, "Telecommunications companies with stable revenue bases do not have such corporate cultures." He said, "They are bound to lose when competing with startups that manage their businesses with their lives on the line."

Professor Kwon Oh-sang, adjunct professor at Yonsei University Law School, also said, "The telecommunications equipment industry can be seen as a so-called 'dumb pipe,'" adding, "It has become an industry where just building the pipe and charging money is enough to make a living." He continued, "As the platform industry rises, telecommunications companies have tried to move beyond telecommunications, but fundamentally lack an innovative mindset," advising, "It is necessary to create added value through telecommunications infrastructure."

Professor Lee Sung-yeop of Korea University explained, "The three major telecommunications companies have a strong tendency to prioritize network advancement, pricing, and quality management for basic telecommunications services," adding, "They basically tend to regard management as the essence of business." Organizations strong in management tend to show weaknesses in the face of change because they think change must also be managed. Professor Lee said, "To enter new fields, one must be bold and desperate." He pointed out, "Although they are diversifying their portfolios, it feels like they are entering new areas as a trend," and added, "This is why criticism continues that they are not really trying to achieve results but are only pursuing moderately stable profits."

Experts agree that the government should more actively induce innovation in telecommunications companies. They unanimously stated that change and innovation, not management, are necessary for the future of Korea's telecommunications industry. In this regard, the government has judged that the three major mobile carriers have become complacent with the current situation, causing market competition to disappear, and is promoting the creation of a fourth mobile carrier. The fourth carrier is expected to play the role of a 'catfish' to revitalize competition in the telecommunications market. The fourth carrier plans to offer specialized services using the 5G 28 GHz frequency band, which the three major carriers have given up. However, it is facing difficulties finding new operators who can bear the enormous initial investment costs.

Professor Hwang Dong-hyun of Hansung University predicted that it will not be easy to find a fourth mobile carrier to enter the entrenched telecommunications market unless the government provides exceptional incentives. He explained, "There are ways such as significantly discounting the frequency fees by more than 50%, providing tax benefits, or protecting and supporting the new entrant so that it is not placed at a disadvantage in competition with existing operators."

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