New Band New Player
The monopoly structure of Korea’s three telecoms companies -- SK telecom, KT and LG Uplus -- has lasted for more than 20 years. To make a change in this structure, the Korean government will lower the frequency allocation fee for a new operator and provide the new operator with support such as loans of up to 400 billion won.
The Ministry of Science and ITC (MSIT) announced on July 6 a plan to promote competition in the Korean telecommunications market to develop the market and ease people’s burden of paying high telecommunication service fees.
The MSIT will first allocate a 28 GHz frequency for five years for the new operator’s differentiated 5G mobile communication services. The charge for the allocation will be set lower than approximately 207.2 billion won (US$159 million) paid by the three mobile carriers at the time of the first 5G allocation in 2018. Mobile carriers’ obligations to build 15,000 network nodes will also be relaxed for the new service operator. The payment method for the allocation fee will also be adjusted from 25 percent of the total amount in the first year to 10 percent to reduce the new operator’s initial cost burden.
In addition, given the short reach of the 28 GHz band, the new mobile carrier will have difficulty in building a nationwide network, so the MSIT will actively consider the allocation of mid- and low-band frequencies such as a 3.7 GHz frequency for general 5G services.
To help the new operator provide smooth services at the beginning of its business, the MIST will allow the new service provider to use networks of other telecommunications companies in areas where the new service provider has not built networks yet and ease the new service provider’s cost burden through financial support and tax credits of up to 400 billion won.