SKT meets with KT, LG over 5G frequency auction
By Baek Byung-yeul
The frequency auction of the fifth-generation (5G) network failed to produce a buyer due to the fierce competition of Korea's three mobile carriers, the Ministry of Science and ICT said Friday.
The ministry began a frequency auction of the 5G network beginning at 9:30 a.m. at the Telecommunications Technology Association in Seongnam, Gyeonggi Province. With the opening price at 3.3 trillion won (about $3 billion), the country's three mobile carriers -- SK Telecom, KT and LG Uplus -- competed for 28 blocks in the 3.5-gigahertz spectrum and 24 blocks in the 28-gigahertz spectrum.
The auction is comprised of two stages. During the first stage, the mobile carriers were supposed to decide the number of blocks assigned to each of them while they were scheduled to decide the locations of the blocks in the second stage.
Given that the first stage was not completed by 3 p.m., the ministry announced it decided to hold the second stage of the auction on Monday. The ministry added the first stage will also be postponed if it fails to meet the conclusion by 5 p.m.
There have been great expectations for the 5G frequency as it marks a major step forward for the goal of beginning the world's first commercial 5G services next March.
Mobile carriers are required to secure sufficient frequency bands to supply stable services.
The three telecommunication companies have their eyes on the 3.5-gigahertz frequency band. Dubbed the “golden frequency band,” the 3.5-gigahertz band has high scalability while avoiding the interference phenomenon. Using the 3.5-gigahertz band, companies can provide better services at longer distances.
Compared with the 3.5-gigahertz spectrum, mobile carriers can offer faster speed in the 28-gigahertz spectrum. As the band has shorter reach, however, companies have to put up more money to build signal stations.
The 3.5-gigahertz band will be sold in 10-megahertz blocks. The minimum bid is 2.65 trillion won with a period of use for 10 years. The 280-gigahertz will be sold in 100-megahertz blocks. The starting bid is 621.6 billion won with a period of use for five years.
In the auction, one mobile carrier is allowed to take up to 100-megahertz of the 280-megahertz bandwidth of 3.5-gigahertz. Industry insiders presume SK Telecom is likely to make a bid for 100-megahertz of the 3.5-gigahertz frequency band.
SK Telecom originally wanted to secure at least 120-megahertz of bandwidth before the ministry limited the maximum amount to 100-megahertz. To offer all companies the opportunity to attempt 5G business under similar conditions, the ministry earlier set the limit on the maximum amount of bandwidth that can be assigned to one mobile carrier.
KT is also expected to make a bid for 100-megahertz of bandwidth. The country's second largest mobile carrier has been keen to promote 5G services.
The No. 3 player LG Uplus is expected to use a flexible strategy reacting to the moves of the others. If the bid stays strong, there is the possibility for KT to make a concession and lower its goal to 90-megahertz of bandwidth.