Seoul City Withdraws KkachiOn Project... Cooperation with Ministry of Science and ICT

'Kkachion' Operated by 5 Autonomous Districts
Preparation for Transfer to 3 Major Telecom Companies
Budget Reduced from 102.7 Billion to 2.1 Billion Won

[Asia Economy Reporter Lim Hye-seon] The Seoul Metropolitan Government is terminating the ‘public Wi-Fi project (Kkachion)’ that has been dragged on for over three years amid controversies over ‘illegal and redundant investments.’ In this process, it is expected to continue the controversy until the end by announcing plans to entrust the operation of five autonomous districts currently in pilot service to the three major telecom companies.

Kkachion handed over to the three major telecom companies

According to the Seoul Metropolitan Government and the mobile telecommunications industry on the 23rd, the city has decided to transfer the public Wi-Fi ‘Kkachion,’ which has been piloted in five autonomous districts including Seongdong, Guro, Eunpyeong, Gangseo, and Dobong, to mobile telecommunications operators such as SK Telecom, KT, and LG Uplus, and has begun preparations. The Kkachion project, which was planned to be installed in the remaining 20 autonomous districts, will be completely suspended. Instead, it has decided to cooperate with the Ministry of Science and ICT’s public Wi-Fi project. The budget allocated for the Kkachion project has also been reduced from 102.7 billion won to 2.1 billion won.

A Seoul city official explained, “The city will actively cooperate in regional selection for the Ministry of Science and ICT’s Digital New Deal project. The existing Kkachion project is being prepared to be serviced by the three telecom companies, and the final progress will be reported to the Ministry of Science and ICT around April.”

Seoul plans to select the mobile telecommunications operators to take over the existing Kkachion project by March. The problem is that the operating costs are planned to be borne by the telecom operators. A Seoul city official stated, “The three telecom companies are already charging their subscribers for Wi-Fi usage and other fees, so the city has no plans to additionally compensate for operating costs.”

The telecom operators, who initially expected that the city would at least cover the operating costs through a consignment project, expressed disbelief. An industry insider said, “Seoul is dumping the project it started onto the telecom companies and telling them to handle any future operating costs on their own.”

Three years of ‘illegal and redundant investment’ controversy

In the past, Seoul planned to build smart city infrastructure by installing 5,954 km of its own ultra-high-speed private communication network, 11,030 public Wi-Fi units, and 1,000 public Internet of Things (IoT) networks throughout public living areas such as major roads, traditional markets, and parks. However, the act of local governments directly laying communication networks and mediating communication was controversial from the start as it was illegal under current law (Article 65 of the Telecommunications Business Act). Although the project entity was changed from the Seoul Metropolitan Government to the affiliated Seoul Digital Foundation through mediation by the Blue House, this too was canceled due to issues with the foundation’s scale and business registration procedures.

There was also controversy over redundant investment. The Ministry of Science and ICT is conducting public Wi-Fi construction projects with 17 local governments nationwide, including Seoul, raising questions about whether it is necessary for each local government to separately install private networks at great cost.

However, with the intention of eliminating blind spots in essential communication services and supporting vulnerable groups, Seoul has pushed forward with the project. So far, Seoul has invested over 20 billion won in Kkachion. A total of about 7,600 ‘Kkachion’ units have been installed in 1,450 indoor public facilities such as welfare facilities and job and startup support centers within Seongdong, Guro, Eunpyeong, Gangseo, and Dobong districts.