Eyes on KT over wireless spectrum auction

Bidding for 1.8 gigahertz bandwidth to go over 1 trillion won Monday


All eyes are now on KT Corp.’s participation in the country’s first wireless broadband spectrum auction as the company has put pause to the process Friday after the bidding price neared 1 trillion won ($928.33 million).

The bidding comes after the Korea Communications Commission launched radio spectrum auctions of three different ranges ― 800 megahertz, 1.8 gigahertz and 2.1 gigahertz ― on Aug. 17.

LG Uplus, the only mobile carrier allowed to bid for the 2.1 gigahertz range, took home 20 megahertz bandwidth of the 2.1 gigahertz range for 445.5 billion won. However, SK Telecom and KT have been competing for the 1.8 gigahertz range with the minimum bid priced at 445.5 billion won. There were no bidders for the 800 megahertz radio spectrum. All licenses will be given for 10 years.

Industry watchers earlier predicted that the final bid to obtain the 20 megahertz bandwidth of the 1.8 gigahertz range would be around 800 billion won, but the price rose as high as 995 billion won in the 82nd round of bidding, which led KT to call it a day. Bidders could each put their bid on hold twice during the auction.

KT was seemingly hesitant to go through with the bidding as the next bid would push the final price to more than 1 trillion won, according to industry sources. The auction will continue Monday morning.

The radio spectrum could be used for 3G communication services as well as fourth-generation communication technologies such as Long Term Evolution.

Currently, SKT has a 30 megahertz bandwidth of the 800 megahertz range and 60 megahertz bandwidth of the 2.1 gigahertz range, while KT has 20 megahertz bandwidth of the 1.8 gigahertz range and 40 megahertz bandwidth of the 2.1 gigahertz range.

SKT and KT both need the new radio spectrum to improve 4G services because their existing radio spectrums are used for 2G and 3G service subscribers. Although SKT commercialized its LTE service in July, KT has not been able to announce the start of its LTE services.

An SKT executive said the company expects to lower the number of 2G subscribers and use the emptied wireless bandwidth for the LTE services, but it will need the new 1.8 gigahertz range to offer better 4G communications services within two years.

“SKT will take home the 1.8 gigahertz range. It is a matter of how much the new wireless broadband spectrum will cost,” said the executive.

By Cho Ji-hyun (sharon@heraldcorp.com)