By Kim Yoo-chul
The nation’s telecom regulator will name a fourth mobile carrier in February.
The Korea Communications Commission (KCC) said Thursday that Korea Mobile Internet (KMI) and Internet Space Time (IST) have both submitted applications for mobile business licenses.
It will allocate a 2.5-gigahertz radio frequency block for the fourth service provider.
``We really want to stimulate competition among firms by inviting a new wireless carrier in the sector. We fully acknowledge what consumers want. We will go ahead with our plan as scheduled,’’ said an official from the government agency asking not to be identified.
The two bidders are expected to face cutthroat competition in the bidding process because they believe the license will help them create sizable revenue amid the rising consumer demand for cheaper telecom services with help from the government.
``IST has applied for a license to offer cellular access based on WiBro networks, the local variant of mobile WiMAX, by forming a strategic partnership with a Taiwanese chipmaker. We have starting capital of 700 billion won,’’ said Yang Seung-taek, the chief executive of IST and a former information technology minister.
``The new wireless carrier will directly compete with the current trio. A new market player means healthier competition between the existing carriers, which is good for consumers because there will be more chances for wireless services at cheaper prices but with competitive service qualities,’’ said the KCC official.
SK Telecom and KT lowered their base rates earlier this year due to pressure from regulators to reduce costs for consumers.
The KCC had previously refused applications from companies vying to receive the nation’s fourth mobile license. KMI failed three times to secure approval to operate a network using the WiBro standard.
Market experts say it remains uncertain whether a newcomer will change the landscape of the saturated local telecom industry
But there are some possibilities that a fourth service provider could awaken idling demand for cheaper telecom services.
``We think the fourth service provider is unlikely to have a big impact on the local market, overall. The market structure with the leader SK Telecom and runner-up KT is unlikely to be affected much,’’ said an analyst at Korea Investment, Thursday.
The Korean government has been accelerating its efforts to nurture the market for mobile virtual network operators (MVNOs) for better consumer choices and to lower tariffs as part of a drive to tame inflation.
It has confirmed its plan to vitalize the market for MVNOs despite strong resistance from the existing three carriers, including the smallest LG Uplus.
MVNOs rent networks from existing operators to offer cheaper mobile services.
But SK Telecom, KT and LG are still asking firms to pay more for network wholesale prices, a move aimed at blocking a new player from accessing the market.