Endless 5G frequency minimum auction in controversy… Expert might be in need in ‘tender’
Jong Ye Lin | yeslin@ | 2018-04-23 10:59:06

While the Korean government has unveiled a draft of a 5G cellular auction to be held in June, three mobile operators and the government are fighting for the minimum auction price. Telecommunication industry claims that the minimum auction price is too high, while the government is arguing that it offered a reasonable price considering the supply price of the 4th generation mobile communication (LTE) auction. Until the government gives a specific amount of bid increments at the end of this month, controversy is likely to continue.

According to the industry on April 22, mobile carrier has raised its voice every day because the government offered the lowest auction price. The Ministry of Information and Communication (MIC) of the Ministry of Information and Communication (MIC) announced that the Ministry of Information and Communication (MIC) will supply KRW 2,654.4 billion for a period of 5 years, of the total. If the two frequencies are combined, the starting price of the auction is KRW 3,276 billion. An expert said, "The minimum auction price is the highest level since the introduction of the auction system in 2011." In the case of 4G mobile telecommunications (LTE), the auction price is set at KRW 1,152 billion in 2011, KRW 1,920 billion in 2013, and KRW 2,257.9 billion in 2016.

The mobile carriers are worried that the contract price will soar from KRW 7 trillion to a maximum of KRW 10 trillion. This is the reason why the 3.5GHz band supply is insufficient. In the case of the clock method introduced in this case, the amount of frequency is determined in step 1, and the position is determined in step 2. In the first stage, which determines the quantity, the price is likely to surge as the number of blocks is increased to 28 by 10MHz. Currently, SK Telecom is seeking 12 blocks (120 ㎒) and KT and LG U + for 10 blocks (100 ㎒). It is over 40 ㎒ than the 280 ㎒ supplied by the Ministry of Information and Communication. A carrier official said, "The price is going to go up until one of the operators gives up or gives up."

The Ministry of Information and Communication said, "The winning bidder will not soar according to the concern of the carrier. “We will set incremental bids so that the winning bidder does not rise to the top of the ceiling through a lot of simulations," said Ms. Therefore, it seems that the Ministry of Finance and Economy (MIC) may increase the bid increment to a higher level. In this case, some operators may give up quickly and the price may not be able to jump significantly as the round ends sooner.

The carriers are also putting a burden on the already allocated frequency bands. Kim Sun-yong, managing director of KT, said, "Currently, the three mobile carriers are paying KRW 1.4 trillion annually for the frequency allocation." Even if 5G is allocated at the minimum auction price, more than KRW 400 billion is added annually, "He said. The frequency allocation price is based on 3% of sales under the Radio Law. Currently, mobile carriers are paying 5.9% of its revenues for the frequency allocation.

The Ministry of Information and Communication explained that carriers can save investment costs in the 5G development phase. In LTE, the frequency is distributed several times in small increments, but 5G provides the maximum amount that can be supplied at one time. If you supply a broadband, you do not have to re-install the base station, which reduces labor and installation costs. Lee said, "It is difficult to say that two to three times the investment cost is needed compared to LTE, which is claimed by some mobile carriers." In the case of one carrier, .

First, the 5G frequency auction has continued to be compared with the UK. The UK, which has recently launched the world`s 5G frequency auction, has set the minimum auction price at W45bn while supplying the 3.4GHz band for 150 years with a bandwidth of 150MHz. The government`s supply price for the 3.5GHz band is 30 times higher. The UK, which has recently completed the 5G frequency auction, was awarded at about KRW 1.7 trillion, surging 39 times from its start. An official said, "Korea`s starting price is 1.6 times more expensive than the contract price."

On the other hand, the Ministry of Information and Communication said it should not make a simple comparison with Britain. A ministry official said, "The minimum auction price should be balanced not cumulatively but cumulatively." In the case of the 3G network, which has been focusing on the UK, it was awarded KRW 38 trillion."

By Jong Ye Lin yeslin@

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