5G frequency auction price to increase?…‘Seal bidding’ focused at the end

[ Kim Ji Yeong kjy@ ] | 2018-05-15 10:35:40

[Digital Times, Kim Ji-yeong] `Seal bidding` is attracting attention as a last-minute variable of the 5G mobile phone frequency auction the government is expected to launch next month. The 5G frequency auction confirmed by the Ministry of Science, Technology and Information (MIC) announced on May 3 is unlikely to generate a variable. Finally, it is analyzed that the possibility of sealing bidding is the last parameter to determine the price.

According to industry sources on May 14, the Ministry of Information and Communication applied a 100MHz bandwidth for each 3.5GHz band in the 5G frequency auction, which is on June 15 and a 0.3% to 075% increment for every bid. It is an apparatus to prevent the auction from overheating and flowing into the curse of the winner in advance.

The possibility of overheating of the auction, which was a concern, was greatly reduced when the Ministry of Finance and Economy set up various devices to prevent overheating of the frequency auction. The 5G auction launching two frequency bands is the highest in history with KRW 3,276 billion. The government has lowered bid increments from previous LTE auctions. The maximum increment of each round bid is set at 1% and it is decided to be applied within 0.3 ~ 0.75%. In past auctions, the bid increments were applied up to 3% and 0.75 ~ 1%. Here, the first round was also limited to rounds up to 50 rounds. If the 1% bid increment is applied, it will be KRW 4.3 trillion in the first round of 50 rounds. Even if the bidding increment presented by the Ministry of Information and Communication is applied to the final round, there is a possibility of staying at the KRW 3 trillion levels.

Meanwhile, it is more likely that `seal bidding` set at each stage will act as a variable affecting the final bid price. The auction is divided into two stages, one to determine the amount of bandwidth and the second to determine the location, based on the bearer block approach. In the case of the first stage, the price increases according to the increment of the bid for each round. If frequency supply and demand is not determined up to 50 rounds at this time, the owner is taught by seal bidding.

SK Telecom is now planned to maintain 100MHz range and KT and LG U + are targeting 100MHz. This way, the probability of going to seal bidding is not low. It is inferred that there will be more room for the carrier to challenge each round because the bid increment is not high.

In the case of second stage, the sealing bidding method is performed according to the preference according to the position. Unless the three companies write the same price, the auction ends at once, so the price can be higher. Currently, the additional frequency that can be used for 5G applications is practically only 20 MHz. Therefore, three of the three positions A, B, and C can be interested in A, which is adjacent band of 20 MHz width. The expandable C region is similar. Therefore, there is a high probability of offering a relatively high price at this location.

An industry expert stated, "Although there is a prospect that the auction will end soon after the end of the early termination, none of the carriers will be able to easily abandon the 100㎒. If you go to the last sealed bidding, we can jump to a level higher than the bid increment because I can do it."

By Kim Ji Yeong kjy@

[ copyright ⓒ The Digitaltimes ]

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