By Yoon Ja-young
SK Telecom Monday emerged as the winner in the heated bidding for a bandwidth after its rival KT dropped out.
For SKT, winning is bittersweet since it has to pay an enormous amount after repeated rounds of proposals and counterproposals with some describing it a “Pyrrhic victory.” The final bid by SK Telecom amounted to 995 billion won.
Opting to concentrate on cloud computing instead, KT declined to continue bidding for the 1.8 gigahertz (GHz) band.
“We decided to stop bidding for the 1.8 GHz bandwidth, to prevent social controversy and national loss following excessive competition in an auction that was held for the first time in the country,” KT said.
The Korea Communications Commission (KCC) put up 20 megahertz (MHz) of the 2.1 GHz band, 20 MHz of the 1.8 GHz band, and 10 MHz of the 800 MHz band for sale in an auction format. LG Uplus, the smallest carrier, got the 2.1 GHz for 445.5 billion won as the regulator blocked other bidders to favor the smallest player. Both SK Telecom and KT had set their eyes on the 1.8 GHz band, which is used by global mobile carriers to support the fourth-generation (4G) longterm evolution (LTE) service.
The auction continued in 83 rounds rising from the initial price of 445.5 billion won. KT requested a time-out Friday and decided not to return to the ring.
Both SK Telecom and KT had set their eyes on the 1.8 GHz band, which is used by global mobile carriers to support the fourth-generation (4G) long-term evolution (LTE) service.
The auction continued in 83 rounds rising from the initial price of 445.5 billion won. KT requested a time-out Friday and decided not to return to the ring.
The 1.8 GHz was estimated to return over 1.5 trillion won in economic value but KT already has 20MHz of the 1.8 GHz band.
The benefit was expected to more than double if it were to win an additional 20MHz of it amid intensifying data traffic.
“Even so, we decided to stop bidding further considering concerns that the cost will be reflected in mobile rates in case the auction went on forever. Instead, we plan to spend the money on cloud computing, content business, and for small suppliers, to contribute to the development of the IT industry,” KT said.
As the winner, SK Telecom wasn’t gloating because it has to pay nearly 1 trillion won for the band. “We are sorry that the auction price became so inflated and cutthroat,” SK Telecom announced. “We expect that our acquisition of the LTE band will make a level playing field for mobile carriers, enabling quality services for our customers,” it said.
As an alternative, KT got 10 MHz in the 800 MHz band in the auction for the initial price of 261 billion won as the sole bidder.
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