[5G Hegemony War④] Park Seong-jung "Investment Incentives Should Include Frequency Reallocation"

Interview with Ruling and Opposition Party Whips of the Science and ICT Committee Ahead of the National Assembly Audit

The main topic of the first National Assembly audit by the 21st Science, Technology, Information and Broadcasting and Communications Committee (STIBC) scheduled for next month is expected to be 5G communication. There is no disagreement between the ruling and opposition parties that urgent and effective measures are needed to secure 5G leadership following the world's first commercialization. Asia Economy interviewed the ruling and opposition party secretaries leading the STIBC to assess Korea's current status after 5G commercialization and to hear about desirable policy directions such as activating investments to lead the 5G hegemony.

Park Sung-joong, Member of the People Power Party./Photo by Yoon Dong-joo doso7@

[Asia Economy reporters Seulgina Jo and Nahum Kang] "It is said that reallocating the frequencies currently in use costs trillions of won. Such aspects should be boldly used as investment incentives so that (mobile carriers) can invest that money into 5G communication infrastructure."

Park Sung-joong, the People Power Party secretary of the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee (STIBC), stated in an interview with Asia Economy on the afternoon of the 17th that bold government-led investment incentives are urgently needed to secure 5G leadership.

Park said, "The most important thing in the Fourth Industrial Revolution era is building the 5G network, called the 'data highway,' but the tax burden is increasing, and there is no policy support such as low-interest loans. Compared to overseas countries, investment support is very insufficient." He cited Japan's example, which applies a 15% tax credit rate on additional investments, saying, "5G tax credits should be expanded to include research investment beyond construction costs, and low-interest loans from the financial sector are also necessary."

He argued that incentives to draw out the investment capacity of operators are essential in the 5G era, just as Korea succeeded in becoming an 'ICT powerhouse' based on large-scale telecommunications infrastructure investments in the 1990s and 2000s.

In particular, Park expressed concern that the upcoming frequency reallocation scheduled for next year could further shrink 5G investment due to excessive price burdens. He added, "Such aspects should also be boldly used as investment incentives," emphasizing, "Companies have no choice but to hesitate to invest when 5G business models that guarantee profitability are uncertain. The government's role is to create an atmosphere and system that enable active investment."

On that day, Park also pointed out the accelerating encroachment of global platform giants like Google in the domestic ICT market as a concern. This is based on the judgment that the rapidly growing 5G upstream and downstream markets could be lost. Park lamented, "YouTube's annual advertising revenue reaches 5 trillion won, but we cannot impose a single tax on it," adding, "The National Assembly is also considering countermeasures."

Among the current issues of the STIBC, he cited the so-called 'application toll,' referring to the app commission controversy, as the area of greatest interest. Earlier, Park had proposed a partial amendment to the 'Telecommunications Business Act' to prevent app market operators with monopolistic positions, such as Google Play and Apple App Store, from forcing specific payment methods or imposing unreasonable discriminatory conditions.

He also mentioned the recent portal public opinion manipulation issue on the agenda, stating, "Operators should disclose how artificial intelligence (AI) algorithms work. The fact that Google's market share expanded from 3% just three years ago to 30% now is because many citizens do not recognize the fairness of portals," he asserted.