Korea's telecommunications regulator nixed bids for a new mobile operator license on Friday, raising concerns about the future of the wireless broadband (WiBro) technology and the government's plan to cut mobile tariffs.
Korea Mobile Internet lost its bid to win a mobile operator license for the third time and Internet Space Time, a consortium of some 1,800 small firms, also failed to get into the market, the Korea Communications Commission (KCC) said in a statement.
The two consortiums had planned to offer nationwide wireless services based on WiBro technology with fees that would have been up to 30 percent cheaper than current rates.
The rejection is seen as a blow to WiBro technology, the locally developed high-speed wireless Internet that is seen as losing ground to another high-speed wireless data service called long-term evolution (LTE) technology.
The KCC's decision also raises questions about the government's earlier pledge that it would try to pressure the country's three mobile operators, SK Telecom Co., KT Corp. and LG Uplus Corp., to cut mobile tariffs. High tariffs have been criticized for adding to the financial burdens placed on households.
"It is regrettable that the project to reduce mobile rates and promote WiBro technology fell through," Kim Choong-seek, a KCC commissioner, said during the KCC meeting.
The commission said Korea Mobile Internet, which had pledged to invest heavily to build a new network, did not have a realistic investment plan.
Internet Space Time also failed to convince the commission about its investment proposals, particularly after conglomerate Hyundai Group announced its sudden withdrawal from the consortium two days ago.
"To fuel more competition in the mobile market, for now (we will) try to bring more attention to the MVNOs," said KCC chairman Choi See-joong.
MVNOs, which stands for the mobile virtual network operators, are mobile operators that lease networks from the existing carriers.
The two consortiums that failed to win licenses proposed to build new networks, which would require heavy investments. (Yonhap)