Bandwidth Bone of Contention Among Mobile Operators
By Kim Tong-hyung
Staff Reporter
SK Telecom dominated mobile telephony for the past decade, but rival carriers have loudly complained that has more to do with the company's exclusive 800 megahertz (MHz) license than successful business strategies.
Now with the government moving to end SK Telecom's monopoly and allow KTF, LG Telecom and a possible fourth carrier to share the prized spectrum by 2011, bandwidth is once again the biggest issue in telecommunications.
ccording to the Korea Communications Commission (KCC), the country's broadcasting and telecommunications regulator, the smaller carriers are to be assigned 40mhz of spectrum from the 800 to 900MHz bandwidth.
Half of the available bandwidth comes from the 20mhz the government takes from SK Telecom, which currently uses two blocks combining for 50MHz within the 800MHz bandwidth. The company's current 800MHz license expires in June, 2011.
The 900MHz bandwidth is currently used for FM radio and public operations. The 27MHz available within the 2.3GHz bandwidth, currently used by KT and SK Telecom for their WiBro (wireless broadband) services, the Korean version of mobile WiMAX, will be allocated to a new wireless carrier.
Although the carriers will be required to use the newly allocated bandwidth for third-generation (3G) services and beyond, government officials said they are considering allowing the companies flexibility to use the spectrums for 2G customers as well.
The KCC is expected to announce a scheme for reallocating the bandwidth by the end of the year.
``We are considering a wide range of methods for redistributing the bandwidth, whether to have the government judge and select the carriers for different blocks and give them a price, which is what we are doing now, or introduce an auction,'' said Park Yun-hyun, an official from KCC's spectrum policy division.
Although government officials have yet to reach a conclusion, KTF and LG Telecom are likely to be required to return their licenses for the current blocks they use within the 1.8 gigahertz (GHz) bandwidth for their 2G services when they are allocated new spectrums from the 800 to 900MHz range.
``The carriers will be allocated the spectrums next year and will be able to use them in 2011 when SK Telecom's current license expires,'' Park said, adding that the new licenses may last for around 20 years after July, 2011.
SK Telecom gained exclusive access of the 800MHz bandwidth in 2000 when it acquired Shinsegi Telecom, then the only other 800MHz operator.
KTF and LG Telecom argue that SK Telecom's monopoly of the bandwidth effectively eliminated fair competition, claiming it as the biggest reason for the company's 50 percent-plus market share.
Compared to the 1.8GHz bandwidth used by the smaller carriers, the 800MHz bandwidth provides an advantage in voice quality, as lower frequencies have superior coverage and stronger wave diffraction that allows signals to travel better through interfering objects such as hills and buildings.
According to an industry report, carriers operating in the 1.8GHz bandwidth needs 1.65 to 2.7 times more base stations to provide comparable voice qualities with 800MHz carriers.
This means that a company like SK Telecom could manage to spend a lot less on its communication network, such as establishing base stations and installing repeaters, compared to its rivals operating at higher frequencies.
KTF and LG Telecom had claimed the government can take as much as 30MHz from SK Telecom's licensed 800MHz bandwidth, saying that the company is leaving a large part of its spectrums unused and operates its 3G W-CDMA services on a different bandwidth, 2.1GHz.
In a study announced in June, Bae Sung-hoon, a telecommunications professor at Hanyang University, claimed that SK Telecom is ``wasting'' 24.2MHz of its allocated 800MHz bandwidth, based on spectrum usage during maximum traffic hours which was calculated by International Telecommunication Union (ITU) methods.
However, SK Telecom claimed that they couldn't give up more than 20MHz, saying that about 10 million of its 25 million customers expected in 2011 will remain as second-generation (2G) users. The company also says that its 40MHz cut in the 2.1GHz bandwidth for 3G services could support only 12 million users.
``We aren't considering taking any more than 20MHz from SK Telecom's 800MHz bandwidth,'' said Park.
Different Usage Plans
LG Telecom is planning to use the new spectrums for its planned fourth-generation (4G) services, while KTF will use the extra bandwidth to support its 3G services, currently operating on the 2.1GHz band.
Unlike SK Telecom and KTF, LG Telecom didn't make the transition to W-CDMA, deciding to return its 2.1GHz bandwidth in 2006 and provide mobile data services based on CDMA2000 1X EV-DV (evolution data voice) technology instead. This had let to a disadvantage in global roaming and acquiring foreign-made handsets.
Although the KCC is planning to additionally allocate the 40MHz of spectrum within the 2.1GHz band to current and new mobile operators, the interest among the smaller carriers seems low as to when bandwidths at lower frequencies is to become available.
SK Telecom and KTF are combining to use 80MHz within the 2.1GHz bandwidth for their 3G services, which could support up to 24 million users. The number of 3G users is expected to pass the 24 million mark by 2010.
Although KTF and LG Telecom are happy about gaining access to the 800MHz bandwidth, the companies stress they should have an advantage in picking the spectrums over a new carrier.
``We have been suffering a fundamental disadvantage over the past 10 years due to the difference in bandwidth, and we can't allow a new carrier stepping in front of us again,'' said a KTF official.