The first auction for the commercialization of the world`s first 5G (G) mobile communication was revealed. It is expected to be the largest ever frequency auction with a total bid of 2680㎒MHz and the minimum bid price is about KRW 3. 3 trillion.

The Ministry of Science and Technology announced on April 19 that it plans to allocate 2018 mobile telecommunication frequencies at the The K Hotel in Yangjae-dong, Seoul. The Ministry of Information and Communication will announce the frequency allocation plan for the 3.5GHz and 28GHz bands based on the public announcement on the day, and announce it at the beginning of next month. The auction goes in June. "The 5G frequency auction plan focuses on maximizing the ripple effect, which is the core infra of the 4th industrial revolution," said the director general of the Ministry of Information and Communication, Ministry of Information and Communication. "The details of the frequency allocation, "He said.

The biggest feature of this 5G frequency auction is the simultaneous supply of 3.5GHz band and 28GHz band. The Ministry of Economy, Trade and Industry (METI) has decided to auction the bandwidth of 280MHz in the 3.5GHz band and 2400MHz in the 28GHz frequency band. In the 3.5GHz band, 24 blocks are auctioned at 28 blocks for 10 blocks and 100㎒ for 28 ㎓. This is about 7 times the 410MHz bandwidth, which is the total of 2G to 4G frequencies. The usage frequencies of mobile communication frequencies by households are 2G 30MHz, 3G 40MHz, and 4G 340MHz.

The 5G frequency this year is the largest ever, but less than initially expected. Of the 3.5GHz band where public interference and interference problems have been raised, the allocation of 20MHz bandwidth has been reserved. The Ministry of Information and Communication decided to decide whether to supply the 20 MHz protection band after the additional verification according to the trend of international organizations discussion. 28GHz frequencies were expected to be sold up to 3GHz. However, the demand for 28GHz by the three carriers, 800MHz, 2400MHz in total, so the 600MHz band reduced accordingly.

The lowest competitive price, which will have the biggest impact on the final bid price, is KRW 2.56 billion for 10 years and KRW 62.16 billion for 28 ㎓. For each block, 3.5GHz is worth KRW 94.8 billion for 10MHz and 28㎓ is KRW 25.9 billion for 100MHz. The band of 3.5GHz was set at a value of KRW 2.60 trillion in the 140MHz band at the time of the auction in 2016. The 28GHz band, which has uncertainties in terms of profitability and technology, is to revalue its value in reallocation. The auction price is expected to reach a record high of KRW 3.27 trillion. The final bid price was estimated at KRW 7 ~ 8 trillion. However, it is expected to rise to KRW 10 trillion at present.

The Ministry of Information and Communication has prepared three plans for the total amount of frequencies that a telecommunication company can take. It plans to limit the number of winners to 100 MHz, 110 MHz and 120 MHz. This amounts to 37%, 40% and 43% of the total frequency allocation, respectively. The government has clarified the position of `impossible` with respect to equal distribution and winner-taking, but depending on the result of the total amount limitation, it is close to equal distribution in case of one eye and differential permission in case of three eyes. In the last three times, the frequency band of 20MHz, which is 40% of the price of 50MHz band, is 40㎒, which is 35% and 31% respectively. The price of the third band is 43% of the total.

Auction rules are clocked. The first step determines the amount of frequency and the second step determines the frequency location. In the first stage, the rounds are repeated until the supplied quantity and demand of 3.5 GHz 28 and 28 GHz 24 blocks are matched. In the second stage, each vendor performs sealed bidding according to the location and wins the best combination.

The obligation to build the network has eased. 3.5GHz is required to build 15,000 base stations, and 28GHz is required to build 15% within three years to 100,000 devices. In 2016, it imposed a mandatory rate of 15% for one year and 55% for three years. 5G is expected to ease the burden on carriers as much as the initial investment cost is expected to be enormous.

In the mobile communications industry, expectations and worries about the frequency auction, which is the beginning of 5G service, coexist. An industry official said, "The starting price of the auction is so high that it will inevitably increase the investment cost of the telecom companies," he said. "We should also consider ways to reduce the burden on operators to reduce telecommunication costs."

By Kim Ji Young kjy@


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