South Korea opened up its telecom sector to foreign investment, but made it clear that the country’s three main mobile operators are off limits, the Wall Street Journal (WSJ) reports.

Regulations will be eased to allow foreign investment in small operators as part of free trade agreements with the EU and US.

Foreign investment in the telecom sector was previously limited to 49 per cent but non-Korean companies can now take 100 per cent ownership in telcos – as long as they create a local holding firm for its stake.

However, SK Telecom, KT and LG Uplus are not open to investment. A Ministry of Science, ICT & Future Planning official said the new rules apply to a few small companies providing mobile and fixed-line communication services.

Although reasons were not given, the WSJ report speculated it could be related to security concerns and strategic importance of network infrastructure.

Last month, the authorities in India removed limits on foreign ownership of telecoms companies. This move, proposed by the country’s Telecom Commission, is aimed at raising long-term foreign investment to boost economic growth.

South Korea had 55.4 million wireless connections at the end of the second quarter, according to GSMA Intelligence. Market leader SK Telecom has 27.1 million connections, with second-placed KT on 17.4 million connections, and LG Uplus in third with 10.5 million.