[5G+ Strategy] 5G 28GHz Allocation to General Companies Within First Half... Breaking Telecom 3 Companies' Frequency Monopoly

'2021 5G+ Strategy Implementation Plan'

[Asia Economy Reporter Eunmo Koo] The monopoly of 5G frequencies by the three major mobile carriers is coming to an end. As the 5G network is gaining attention as a key infrastructure for convergence across various industries, the government has decided to introduce a market competition system by attracting general private companies as regional 5G operators to activate 5G specialized networks. The government plans to supply broadband frequencies for 5G specialized networks to these operators within the first half of the year and create a 5G specialized network ecosystem by linking public projects to generate initial market demand.

On the 26th, the Ministry of Science and ICT announced and finalized the "5G Specialized Network Policy Plan" at the 4th 5G+ Strategy Committee meeting, which aims to promote market competition by expanding the entities building 5G specialized networks beyond mobile carriers to include regional 5G operators. The Ministry plans to prepare a frequency supply plan for 5G specialized networks by March and supply frequencies within the first half of the year after revising related regulations.

A 5G specialized network refers to a 5G network that can be used only in specific areas (such as buildings or factories) and is a customized network specialized for the services to be introduced in that area. Overseas countries such as Germany, Japan, and the UK allocate mobile communication frequencies separately to demand companies or regional 5G operators, allowing the construction and operation of 5G specialized networks.

However, in South Korea, due to unclear market demand and delays in developing indoor equipment, the entities allowed to build 5G specialized networks are limited to mobile carriers who have been allocated mobile communication frequencies. Limiting the qualification for building 5G specialized networks to mobile carriers has continuously raised concerns. The lack of competition is likely to suppress and delay investment, and there is a higher risk of losing the global 5G business-to-business (B2B) market to foreign companies.

The Ministry of Science and ICT plans to resolve these concerns and build competitive 5G specialized networks by diversifying participants through the introduction of regional 5G operators and linking public projects to generate initial market demand. To this end, they will comprehensively review and prepare support measures regarding ▲entities and methods of construction ▲frequency supply methods ▲frequency supply bands ▲strengthening the equipment and terminal ecosystem.

First, the types of regional 5G operators will be classified by construction entity and service target, and 5G specialized networks will be introduced by either reporting as a ‘private network installer’ or registering as a ‘telecommunications service provider’ depending on the type. For example, if a demand company A installs a specialized network and uses it exclusively, it reports as a private network installer; if company A installs a specialized network but also allows company B or visitors within the building to use it, it registers as a telecommunications service provider.

At this time, the frequency supply method varies depending on the type of operator. Private network installers can designate frequencies and open wireless stations after interference analysis according to the current wireless station establishment procedures. On the other hand, those registered as telecommunications service providers receive frequencies through an allocation process. The government plans to prepare detailed supply plans, including the designation of allocation target areas, allocation methods, fee calculation, and interference resolution measures, by March for regional frequency supply.

Broadband frequencies will be supplied. The 5G specialized network frequencies will be supplied within a 600 MHz bandwidth in the 28.9?29.5 GHz band adjacent to the existing 28 GHz band used by mobile carriers, and additional B2B frequency acquisition plans through regional shared use in bands below 6 GHz will be reviewed.

Hong Jin-bae, Director of the Communications Policy Bureau at the Ministry of Science and ICT, explained, "If 5G specialized networks are built solely by mobile carriers, the lack of competition is likely to suppress and delay related investments, and there is a risk of losing the global 5G B2B market. Through this 5G specialized network policy plan, we will create a foundation for various operators to participate in the 5G market and continuously strengthen the competitiveness of the domestic 5G B2B industry."

The Ministry plans to simultaneously promote preparations in equipment and terminals and conduct demonstration and pilot projects to form the initial market. Currently, the equipment industry lacks B2B service models and needs to accelerate technology development for core parts that are highly dependent on overseas sources. The terminal industry also faces difficulties as domestic small and medium enterprises find it challenging to invest manpower and budgets for product development due to uncertain demand characteristics of customized products, and the currently developed modules are expensive.

To address these issues, the government plans to discover and apply service models using 5G specialized networks in public sectors such as ports and defense, accelerate B2B terminal development projects through cooperation between large and small-to-medium enterprises domestically, and establish a virtuous cycle ecosystem for terminal manufacturing. Additionally, they will support expanding R&D and securing references to strengthen competitiveness in core equipment and parts. Previously, 133.8 billion KRW was invested in R&D and demonstration/pilot projects from 2019 to last year, and this year, an investment of approximately 127.9 billion KRW will be made in 5G public leading application projects.