South Korea Eyes June Auction For 5G Network Airwaves

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By Elaine Ramirez

South Korea could get a big jump on its 5G-minded competitors when it auctions next month airwaves for the next-generation wireless network.

The Ministry of Science and ICT May 4 revealed its plan to allocate a total of 2,680 megahertz (MHz) of bandwidth—280 MHz bandwidth in the 3.5 gigahertz (GHz) band, and 2,400 MHz bandwidth in the 28 GHz band. The country’s three major telecom carriers—SK Telecom, KT Corporation, and LG Uplus—are the only eligible bidders.

In the June 15 auction, each company can bid up to 100 MHz bandwidth in the 3.5 GHz band priced at 2.6544 trillion won ($2.5 billion) for a 10-year use, and 1,000 MHz bandwidth in the 28 GHz band priced at 621.6 billion won ($579.5 million ) for five years. Shorter frequency airwaves, such as the 3.5 GHz band, provide data transmission for longer distances. Higher frequency airwaves allow for faster, larger data transfers. But they have a shorter range and don’t travel well through physical obstacles.

The U.S., China, and other advanced economies view the next generation network—ideal for cutting-edge services like connected cars and “internet of things"— as a symbol of their high-tech competitiveness. The auction shows South Korea’s eagerness to launch fifth generation—or 5G—services before other developed nations to cement its reputation as a mobile-savvy economy. South Korea piloted its 5G network publicly earlier this year at the PyeongChang Winter Olympics.

The government expects 5G services to be available to consumers next year, with nationwide coverage by 2020.

KT, the country’s largest telecommunications company, plans to commercially launch 5G services “after the second quarter of 2019,” Lee Jiyoung, deputy head of KT’s foreign communications team, told Bloomberg Law May 4.

“Korea’s aggressive spectrum auctions for 5G position it well for 5G leadership,” Roger Entner, an industry analyst at Recon Analytics, said. “The 280 MHz in the 3.5 GHz band is especially crucial as it is emerging as the global roaming band.”

Seeking More

Not all are satisfied with the auction process. SK Telecom anticipates heavy demand and is seeking more, Lee Yong-jae, a foreign media spokesman for the carrier, said. “We aren’t content with it,” he told Bloomberg Law May 4. “We have a lot of subscribers, so we are worried that they may request large bandwidths.”

The coming auctions divvy out a preset amount that won’t change, but future auctions could vary in amounts allocated if demand for mobile services increases, the ministry said.

South Korea’s 5G auction timing contrasts with its allocation of the previous-generation 4G airwaves. South Korean carriers’ 4G technology was ready when they bought the airwaves for it. But 5G technology is still not ready for commercialization, even though the auction is set to start next month.

That may have affected pricing. The government lowered the price for bandwidth in the 28 GHz band, reflecting investment risks in the super-high frequency, according to the ministry.

To contact the reporter on this story: Elaine Ramirez in Seoul at correspondents@bloomberglaw.com

To contact the editor responsible for this story: Roger Yu at ryu@bloomberglaw.com

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