Final rule of 5G frequency auction to be completed… Last labor pains over ‘total amount limit’
Kim Ji Young | kjy@ | 2018-05-01 14:47:18

[Digital Times, Kim Ji-young] The industry is gaining attention in the final 5th generation (5G) frequency allocation auction, which the Korean government plans to unveil in early May. The "total amount limit" is expected to become a leverage to influence the auction in this auction.

According to the telecommunication industry on April 30, the Ministry of Science, Technology and Information and Communication announced a 5G frequency allocation notice in early May. Details will be included in the announcement, including the limit on the total number of auctions announced on April 19 and incremental bids. As the total amount is increased, the competition between companies trying not to be distracted by the pre-call frequency will become fierce, and the contract prices will surely rise sharply. In the case of 3.5GHz, the Ministry of Information and Communication (MIC) proposed a 100MHz bandwidth, which is 37% of the total bandwidth, a 110MHz bandwidth of 40%, and a 120MHz bandwidth of 43%.

According to the total amount system, the difference in the amount of frequency that can be ensured by each company can be large, and the three companies are setting a sharp angle of confrontation. SK Telecom wants 120MHz bandwidth according to traffic acceptance and 5G roadmap. Meanwhile KT and LG U + are claiming 100 MHz bandwidth due to fair competition.

According to the industry analysis, the increase in bids will affect the final bid price depending on the total amount. At the time of the first auction of the fourth generation mobile telecommunications (LTE) frequency that was carried out in 2011, the increment of the bid was 1% of the immediately preceding round bid. In the 2013 and 2016 auctions, it was 0.75%. It is an analysis both inside and outside that it is likely to be one of these two options.

Meanwhile, if the total amount is set at 120 ㎒, the competition will be activated. SK Telecom, which is trying to take 120MHz, and KT and LG U-Plus, who are trying to check the price, may be able to surge. Therefore, the auction overheating can be prevented by applying the lower bid increments as high as the competition factor. On the other hand, if the total amount is lowered to 100MHz, the auction may be completed in a short time because the three companies such as 100, 100, 80㎒, 100, 90, and 90㎒ can take it. At this time, it is possible to design the auction in the direction of raising the price per round by raising the bid increment.

Park Hyuk-gyu, a professor at Mokwon University, stated, "Although the current minimum bid is set at a high level, the auction round may end soon depending on the limit of the total amount." The final bid price may vary depending on how the limit is determined."

The Korean government is in the process of finalizing the final draft of the plan. An official of the Ministry of Information and Communication said, "We are trying to design a balance so that we can secure appropriate frequency fees and prevent overheating competition according to the principles we have proposed."

By Kim Ji Young kjy@

[ copyright ⓒ The Digitaltimes ]