Next Step in Telecoms
The Korean government will make an official announcement late this month to receive applications for the operation of the 4th-gen mobile telecommunication business under franchise and for the allocation of frequency bands, kick-starting a procedure to select business operators. Ahead of the procedure to choose these new mobile telecommunication business operators, where the best conditions for frequencies and roaming are suggested, competition between potential candidates to secure capital is intensifying. The detail of the selection of 4th-gen mobile telecommunication business operators is expected to be completely revealed by the end of Sept., which is the deadline for applications.
The Ministry of Science, ICT and Future Planning (MSIP) is planning to hasten the procedure by finalizing its discussion on the 700MHz frequency band together with the National Assembly, and to move forward with the plan for frequency bands by posting the progress of the plan on a government gazette by Aug. 10. If 4th-gen mobile telecommunication business operators are concentrated into either Long-Term Evolution Frequency-Division (LTE-FDD) or Long-Term Evolution Time-Division Duplex (LTE-TDD), it will be possible to speed up selling frequency bands to existing mobile carriers.
An official at the MSIP said, "In line with a plan announced in June, the preparation for choosing 4th-gen mobile telecommunication business operators is progressing smoothly without delay." The government has decided to receive applications for business operators once a year, and to allow applications for frequency bands for LTE-FDD that existing mobile carriers are utilizing. Selected mobile carriers will also be allowed to lend 4G networks to other companies for 3 years, after the start of the business. And they will be permitted to charge different rates for Internet connections as well.
Business operators are busy preparing for the 4th-gen mobile telecommunications era. Industry analysts believe that the MSIP has established clear criteria like financial soundness and detailed procedures since 2010, while undertaking the selection procedure for 4th-gen mobile telecommunication six times. Contenders are trying hard to raise capital by forging business alliances before submitting applications. Experts are saying that if a company mobilizes 1 to 1.5 trillion won (US$855 million to $1.3 billion) in capital, it can do business right.
The 4th-gen mobile communication consortium is revealing its intention to participate in the fields of the ICT industry. Korea Mobile Internet (KMI), a local consortium of small businesses led by Gong Jong-yeol, former director of the Ministry of Information and Communication, announced its bid once again. Jang Yoon-sik, former executive at SK Telecom, is taking the lead in executing business strategies for Woori Telecom that was established by small and mid-sized businesses nationwide. On top of that, the KTNET consortium and Quantum Mobile are consistently trying to get business right.
Observers think that business operators will build strategic partnerships before the application process starts. In particular, they appear to keep knocking at the door of the capital market at home and abroad. Business operators preparing for mobile telecommunications are reportedly making contact with Japanese firms like SoftBank and Rakuten, as well as the Samyang Group, which specializes in producing chemical and bio-plastic materials.