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Korea finishes auction for 5G frequency bands

SK, KT get the lion’s share, and LG U+ settles for third place

June 19,2018
Korea finished its 5G auction on Monday, becoming the first country to sell off both of the two major frequency bands needed to develop the next-generation wireless network.

The country’s three mobile carriers will have to pay a combined 3.6 trillion won ($3.2 billion), roughly 300 billion won more than the minimum price set by the government, for the airwaves, which will be key to developing a next-generation 5G network.

The Ministry of Science and ICT started bidding for a total of 280 megahertz (MHz) of bandwidth within the 3.5 gigahertz (GHz) frequency band and another 2,400MHz of bandwidth within the 28GHz band at 3.3 trillion won ($2.98 billion) on Friday.

Frequencies were sold in 28 blocks of 10MHz for the 3.5GHz band and 24 blocks of 100MHz for the 28GHz band. For the more competitive 3.5GHz band, each carrier’s purchases were limited to 100MHz. More bandwidth means faster data flow.

While sales of the frequency blocks in the 28GHz band were completed in the first bidding round on Friday, at a minimum bid price of 25.9 billion won per block, the fight over the more competitive 3.5GHz frequency went on until the ninth round on Monday.

The 3.5GHz frequency band is considered crucial for establishing a nationwide high-speed 5G wireless network, as it travels a longer distance than the higher-frequency 28GHz.

Korea’s largest mobile carrier, SK Telecom and second-place KT both took the biggest possible amount of the frequencies on offer, with 100MHz of the 3.5GHz frequency band. The smallest carrier, LG U+, settled with the remaining 80MHz.

It was the fight between KT and LG U+ trying to take the most of the 180MHz on the 3.5GHz band that delayed the auction, considering SK Telecom was ready to pay as much for its largest possible stake on the band. As the price of the blocks of bandwidth gets more expensive with every bidding round, LG U+ settled for 80MHz.

SK Telecom paid a total of roughly 1.43 trillion won, KT 1.18 trillion won and LG U+ 1.02 trillion over all the sessions involved in the bidding.

KT said it was satisfied with the results of the auction and described it as “reasonable” and based on market principles in a statement released on Monday. LG U+ said it will focus on developing differentiated 5G services.

The Science Ministry said Korea is the first country to have finished the frequency auction for both the 3.5GHz and 28GHz bands, and expressed hope that the country will lead global 5G development. Korean telecoms hope to commercialize 5G networks by next year.


BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]


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