Auction for additional 5G spectrum band delayed

The auction for an additional 5G spectrum band, which was slated to take place sometime this month, will be delayed over the remaining differences between the country’s three largest telecommunication companies, officials said Thursday.

Earlier in the day, the Science and ICT minister and CEOs of SK Telecom, KT and LG Uplus met at the Seoul Central Post Office to discuss the ongoing dispute of the 5G spectrum auction, but failed to come to a conclusion.

After the meeting, Hwang Hyun-sik, CEO of LG Uplus, told reporters that it is regretful that the allocation for the 3.4 to 3.42 gigahertz in the 5G network spectrum is being delayed, saying that a decision should be made quickly for the public’s benefit.

“The minister said the Ministry of Science and ICT will do its part to conclude on this matter as soon as possible, but I did not hear anything about the specific schedule. We will have to see,” Hwang said.

Ryu Young-sang, CEO of SK Telecom, did not comment on the 5G auction dispute.

KT CEO Ku Hyeon-mo said the company will closely examine the demand for frequencies in the 3.7 to 4.0 GHz band in the 5G spectrum and present an opinion to the government, hinting that the company may request for an additional 5G spectrum band.

In December, the Ministry of Science and ICT authorized the auction of the 3.4 to 3.42 GHz band following a request from LG Uplus in July. After months of research, the ministry said the decision was made on the basis that it will improve the quality of telecommunication services for people. It was later announced that the bidding would take place in February.

SK Telecom and KT, however, have resisted the ministry’s decision to go ahead with the bidding, calling it preferential treatment for LG Uplus as the 3.4 to 3.42 GHz band is next to the 5G frequency spectrum currently used by LG Uplus, the country’s third largest mobile carrier.

During the government’s first 5G spectrum auction in June 2018, SK Telecom paid 1.2 trillion won ($1 billion) to secure the 3.6 to 3.7 GHz band and KT spent 968 billion won on the 3.5 to 3.6 GHz band. LG Uplus bought the 3.42 to 3.5 GHz band for 809.5 billion won.

The 20 MHz between the 3.4 to 3.42 GHz band was left out at the time due to interference with neighboring frequencies. The government in December 2019 announced that the problems with the 20 MHz were fixed after technical improvements.

In theory, SK Telecom and KT can join the bidding process. But as each of their 5G frequency spectrum is apart from the 20 MHz placed in the 3.4 to 3.42 GHz band, the two companies would have to use the carrier aggregation technology, which requires a fortune to set up the necessary infrastructure, in order to facilitate the 3.4 to 3.42 GHz band. LG Uplus, on the other hand, can easily use the 20 MHz with a few adjustments of the existing technology and equipment.

Late last month, SK Telecom made a request to the ministry for an additional 40 MHz band in the 3.7 to 3.74 GHz to be available for bidding, citing that the competition in the auction should be fair. The ministry said it will have to review SK Telecom’s request as LG Uplus’ request underwent the process with a task force and open hearings.

“The minister said the government needs to consider the public’s convenience, the fair environment for the use of frequency, encouraging investment and the global 5G supply together,” a ministry official said.

“We will make a decision in the near future after having discussions on the spectrum band request from the three telecommunication companies.”

By Kan Hyeong-woo (hwkan@heraldcorp.com)