LG U+’s request for additional 5G frequency allocation from the government in July of last year was accepted after 11 months. The Ministry of Science and ICT (hereinafter referred to as the Ministry of Science and ICT) has finally confirmed the additional allocation of 20 megahertz (MHz) width for 5G frequencies.
This gives LG U+ an opportunity to additionally take the adjacent 5G frequency band it currently has. On the other hand, the 5G frequency requested by SK Telecom was reviewed separately, and the conditions proposed by KT were not accepted.
Next month’s frequency allocation auction
The Ministry of Science and ICT held a briefing at the government complex in Seoul on the 2nd and announced that it would finalize the allocation plan for the 20MHz wide 5G frequency in the 3.4~3.42GHz band. We plan to accept applications for assignments by the 4th of next month and select candidates during the next month after screening for eligibility.
The auction proceeds up to 50 rounds in a ‘multi-round ascending bidding method’, and if a successful bidder is not determined, a ‘mixed method’ in which a ‘sealed bidding method’ is applied is applied.
The period of use is from November 1, the date of frequency allocation, to November 30, 2028. If only one operator (LG U+) bids alone, it will be reviewed and converted to the government-calculated price allocation method. The lowest competitive price was calculated at a total of 152.1 billion won by reflecting the successful bid price of the auction four years ago and factors that increase its value.
Previously, LG U+ requested the Ministry of Science and ICT for additional allocation of the remaining bands that were excluded from the auction due to concerns about interference with public frequencies during the 2018 5G frequency auction in July of last year. Accordingly, the Ministry of Science and ICT tried to promote an auction for additional frequency allocation in February this year, but a conflict arose when SKT and KT raised the issue of equity.
SKT and KT objected because the frequency in question is LG U+’s human band. When SKT or KT is assigned a corresponding frequency, a separate facility is required to use it. However, if LG U+ takes the section, it can be used immediately without additional investment only by upgrading the software.
The Ministry of Science and ICT discussed the frequency allocation issue through a meeting with the CEOs of the three telecommunication companies, but could not resolve the differences and the auction was postponed.
3.4~3.42GHz band priority allocation key
On this day, the Ministry of Science and ICT decided to prioritize the allocation of frequencies for the bands requested by LG U+. This is because the remaining bands of 3.4~3.42GHz have resolved the problem of interference with adjacent bands and are ready to provide detailed allocation plans. In addition, it was also considered that the positive effects such as promoting investment through quality competition among telecommunication companies when supplying frequencies and improving the quality of 5G services to the public were also considered.
However, the Ministry of Science and ICT decided to change the auction method and strengthen the conditions, considering that this frequency allocation may only be beneficial to LG U+.
Unlike the previously announced auction method, this time, if one operator makes a single bid, the condition that the government-calculated price will be converted to allocation through examination in accordance with Article 11 (1) of the Radio Waves Act is added.
In addition, it was decided to strengthen the obligation to establish a network for 5G quality improvement and early expansion of coverage. Operators who have been allocated frequencies must build 5G radio stations in 150,000 countries by December 2025. In addition, the completion time of the construction of the rural common network, which is being promoted to expand 5G coverage, should be shortened by six months from June 2024 to December 2023.
Additional conditions were also added so that consumer convenience and fair competition requirements could be supplemented if LG U+, which is providing 5G service in an adjacent band, is assigned the frequency. In this case, the frequency allocated by the existing 5G radio station can be used only after first establishing a new 5G radio station of 15,000 stations.
The request for additional allocation of some bands (3.7-3.72GHz, 20MHz) of the 300MHz-wide 3.7GHz band requested by SKT in January was excluded from this plan. It was considered that the study group’s review opinion that if some bands are supplied separately, the efficiency of use of the remaining 280 MHz width may be lowered and that it may affect the future communication competition environment, and that considerable time is required to prepare detailed allocation plans.
Minister of Science and ICT Lee Jong-ho said, “In order to improve the quality of 5G and induce private investment, we decided that it is desirable to supply the 3.4GHz band quickly. It is expected that 5G facility investment will occur.”
The reaction of the three telecommunication companies is mixed
The reaction of the three telecommunication companies to this announcement was mixed. First of all, LG U+ welcomed it and expressed its intention to participate in the auction.
LG U+ said, “We will do our best to secure additional frequencies in line with the government’s allocation announcement schedule.” .
SK Telecom and KT strongly objected. This is because it is not fair for LG U+ to allocate additional bands that it was not able to secure at the auction because it is not fair and there is no real benefit in securing the band that LG U+ decided to allocate this time because it is adjacent to LG U+.
SKT said, “It is regrettable that the plan for additional frequency allocation was abruptly announced without the in-depth policy coordination process on the additional frequency allocation discussed at the meeting between the Minister of Science and ICT and the CEOs of the three telecommunication companies in February.” The additional allocation of target frequencies is concerned in that it does not meet the principles and standards for spectrum supply that the government has maintained since the introduction of the spectrum auction method.”
In addition, he added, “I expect the government’s frequency supply policy to simultaneously use frequency bands that are closely related to each other in consideration of the improvement of public convenience through frequency supply, the growth of the domestic telecommunication equipment manufacturing sector, and the balanced development of the telecommunication industry ecosystem,” he added. .
KT emphasized that consumer benefits are important, but fair competition must be achieved. Previously, KT had argued that LG U+ should impose restrictions on the time and region of use, even if additional frequencies were allocated.
KT said, “In order to establish a fair market competition environment, allocation conditions should be imposed in consideration of the timing of development and deployment of new 5G equipment in the metropolitan area.”
