SK Telecom 2G Shutdown "Not Easy"

530,000 Remaining Users Apply for 2G Service Termination Approval
Ministry of Science and ICT Demands Additional Execution Plans
Corporate Phones and MVNO Details Must Be Supplemented Including Ex Officio Termination Follow-up
2G Spectrum Ends in June 2021
Calls for Swift Decision-Making to Boost 5G Investment

[Asia Economy Reporter Koo Chae-eun] The termination of SK Telecom's 2nd generation (2G) service, which currently has about 530,000 subscribers remaining, is facing difficulties.

The clause in the terms and conditions allowing the company to unilaterally terminate contracts with 011 and 017 number customers who have not used the service for three months was deleted at the request of the Fair Trade Commission. Meanwhile, the Ministry of Science and ICT, which is reviewing the 2G termination, has requested a stricter implementation plan, making the immediate approval uncertain.

According to the industry on the 9th, the Ministry of Science and ICT requested additional supplementary materials regarding SK Telecom's application to terminate the 2G service. They asked for a follow-up plan for the services of customers who were unilaterally terminated. Previously, SK Telecom created terms allowing unilateral termination of contracts for 011 and 017 number customers who did not use the 2G service for three months, but deleted this clause following the Fair Trade Commission's request. A Ministry of Science and ICT official explained, "Although the operator withdrew the terms and reported new terms, resolving the issue for now, the follow-up measures for about 20,000 customers who were unilaterally terminated are also important, so additional materials were requested," adding, "There are also insufficient parts regarding the termination of 2G corporate phones and MVNO (affordable phone) subscribers, so further follow-up plans were requested."

Among the current SK Telecom 2G service users, there are reportedly many corporate phone users from public enterprises whose service contracts are not terminated, as well as MVNO subscribers using SK Telecom's 2G network. The Ministry of Science and ICT plans to weigh the approval of the 2G termination after receiving additional supplementary measures and discussing them with an advisory committee composed of about nine members.

The '1% principle' for remaining subscribers applied during KT's 2011 termination will only be used as a reference. A Ministry of Science and ICT official said, "We will consider the number of subscribers, but since the subscriber characteristics and distribution of KT and SK Telecom are different, it is a matter that needs to be comprehensively considered." The atmosphere inside and outside the Ministry suggests that while they will try to lead a smooth consultation with the operator, there is also a possibility of withholding or rejecting approval if user protection measures are insufficient.

Meanwhile, SK Telecom submitted an application for approval to terminate the 2G frequency to the Ministry of Science and ICT in November last year, aiming to end the 2G service within the year. The telecommunications industry points out that if the 2G termination is delayed, SK Telecom, the number one operator, will inevitably face setbacks in its 5G investment, so a swift decision is necessary. Since the 2G frequency will end in June 2021, quick decision-making and user measures are needed. As of the end of November, SK Telecom's 2G subscriber count was 531,081 (excluding MVNO), about 1.8% of SK Telecom's total subscribers.