South Korean telcos slow to invest in 5G

South Korean carriers SK Telecom, KT and LG Uplus are investing slower into their 5G networks than previous planned, TheElec has learned.

KT has delayed its supply deal for 5G optical repeaters with three subcontractors by six months. The deadline was initially September but this has been pushed to March. FRTek (13.9 billion won), Solid (9.3 billion won) and Kisan Telecom (7.7 billion won) are the subcontractors. Solid and Kisan notified local financial authorities last month.

A person familiar with the matter said KT was delaying its investment into 5G repeaters. The carrier initially wanted to secure the repeaters by late August and sign another deal for more of them, they said. 

FRTek is yet to notify authorities of the delay but is expected to do so as well, they said.

The repeater maker announced earlier this month that it has signed a new contract with KT to supply 5G repeaters. The deal was worth 2.7 billion won and the contract signed on August 27 and announced on September 5. It is tenth of the contract KT signed with the firm for 30.9 billion won in late 2019. FRTek was also the only company to get such a new contract, which is unusual. 

KRTnet Corporation also postponed its contract to build 5G networks in subways with LG Uplus by a year. The carrier scored the lowest in subway coverage out of the three carriers in a government survey last month.

LG Uplus has build 5G in 100 stations out of the 458 stations in the Greater Seoul area. SK Telecom and KT each had 158 stations and 108 stations, respectively. SK Telecom and KT scored 79% in accessibility while LG Uplus scored 70% in the government survey.

SK Telecom, KT and LG Uplus combined spend 3.44 trillion won in infrastructure investment in the first half of 2020, which is less than the amount they agreed with the Ministry of Science and ICT of 4 trillion won.

Another person said SK Telecom was also delaying investing into 5G networks.

South Korean authorities fined the three carriers 51.2 billion won for violating local phone sales and marketing laws. The carriers has promised to invest 710 billion won earlier than scheduled to improve their networks.