Frequency Fighting
A sense of crisis is being felt in the wireless telecommunications industry near the time of its earnings announcements. On paper, mobile telecommunication companies are posting hundreds of billions of won in operating income per quarter. But in fact, some of their real cash flows are even negative. This is because of expenditure factors such as various kinds of investment, interest costs, and dividends have swollen, despite their stalled growth.
Under these circumstances, mobile carriers have tons of work such as preempting the IoT market through telecommunications and demonstrations of the 5G mobile telecommunication standardization targeting the 2018 Pyeongchang Winter Olympic Games. But they are dissipating their energies in catching frequencies.
According to government and industrial sources, contracts for frequencies of 17 bands rented by mobile carriers for 3G and 4G mobile telecommunication and high speed wireless internet service (WiBro) will run out at intervals of two or three years, from next year to 2022. This fact set off extremely hot competition among carriers.
Korea’s rivals such as the U.S., China, and Japan are busy securing new 5G frequencies and technologies for their future. But Korean wireless carriers are bent on catching 3G and 4G frequencies, assuming that they will surely secure 5G technology.
Political and academic circles are concerned that a dogfight among wireless carriers may repeat for the next seven years. Mobile carriers fought tooth and nail to secure more lucrative frequencies and the designation of their use in 2011, 2013, and 2014.
First of all, they are fighting like cats and dogs for 2.1 GHz frequencies surrounded by growing controversy. In the 2.1 GHz bandwidth devoid of bands for satellites, SK Telecom is using three 30 MHz bands, KT two 40 MHz bands, and LG U+ one 20 MHz band in the 120 MHz region. Among them, SK Telecom’s and KT’s frequency use periods will expire in Dec. of next year. LG U+’s contract will run out in 2021.
“SK Telecom’s and KT’s frequencies have been used for 15 years. So the frequencies of one of SK Telecom’s three bands should be auctioned off,” LG U+ is claiming. But “LG U+ exclusively received some frequencies thanks to the government’s consideration of LG U+ as a latecomer. So it does not make sense for LG U+ to demand returns of frequencies used by our customers,” SK Telecom refuted.
In regards to this, the Ministry of Science, ICT and Future Planning is keeping in mind a plan to put the 20 MHz used for LTE services by SK Telecom on the auction block and reallocate the remainders while expressing its embarrassment about the fight among wireless carriers.