Final Allocation Cancellation After Hearing Procedure
Government Plans 4th Mobile Carrier by Reclaiming Frequencies from KT and LGU+, but Telecom Industry Denies Possibility Saying "No One Will Step Forward"
[Asia Economy Reporter Cha Min-young] As the government cancels the 5G 28GHz frequency allocation for KT and LG Uplus and demands SK Telecom to expand its base stations by as many as 15,000 units, a hearing will be held regarding the final cancellation decision. While the possibility of the government reversing its decision is low, the expressions of the three telecom companies are subtly divided.
Final Decision on 28GHz Frequency Allocation Cancellation After Hearing, Reversal Unlikely
On the 5th, the Ministry of Science and ICT announced that it will conduct a hearing procedure related to the cancellation of the 5G 28GHz frequency allocation for the three telecom companies. Each company will undergo one hearing session, and a final decision will be made by mid-month. The Ministry of Science and ICT has stipulated that there must be "substantial reasons" to withdraw the cancellation. Therefore, the possibility of overturning the decision is slim.
If the final cancellation order is issued, KT and LG Uplus will no longer be able to use the 28GHz frequency. SK Telecom must build 15,000 base stations by May 31 next year, when its 28GHz frequency usage period expires.
The expressions of the three telecom companies differ. LG Uplus expressed concern about consumer damage due to the suspension of the 5G 28GHz service related to the cancellation decision. LG Uplus has more base stations built than SK Telecom, which was exempted from the cancellation, although it lagged behind in scores. LG Uplus has installed 1,868 28GHz base stations. SK Telecom and KT have installed 1,605 and 1,586 base stations, respectively.
SK Telecom, which avoided cancellation on the condition of additional base station expansion, also shows a gloomy expression. The 28GHz frequency usage period has been shortened from 5 years to 4 years and 6 months, and it must add 15,000 base stations by May next year. If it fails to meet the conditions, cancellation measures may be taken.
Meanwhile, KT is even described as having "received a gift." A KT official bowed his head, saying, "We feel sorry that the level of infrastructure development did not meet the government's expectations," immediately after receiving the cancellation decision.
Government Plans to Reclaim Frequency and Promote Fourth Mobile Carrier, but Telecom Industry Says "No One to Step Up"
The Ministry of Science and ICT plans to actively promote the entry of a new operator for one of the canceled frequency bands if two operators have their allocations canceled after the hearing procedure. Since the three telecom companies have been negligent in building base stations, the intention is to introduce a "catfish" into the loosened 28GHz band market. As part of support measures for the new operator, the ministry will supply anchor frequencies for signal control needed for service provision in bands preferred by the market and consider a new allocation method allowing operators to choose frequency usage units (nationwide, regional, etc.). Support measures for interconnection and facility provision will also be reviewed to ensure fairness with existing telecommunications operators. The '28GHz New Operator Support TF' kickoff meeting was launched at the end of last month.
The telecom industry believes it will be difficult to find a domestic candidate operator. Some suggest that SpaceX, a U.S. company operating the low-earth orbit satellite communication service "Starlink," is likely to enter indirectly by partnering with a domestic telecommunications operator. Under the current Telecommunications Business Act, foreign operators cannot register as telecommunications carriers. They can only invest in shares, with a 49% limit on shareholding, but indirect investment up to 100% is allowed under the Korea-U.S. Free Trade Agreement (FTA).
An official from the telecommunications equipment industry said, "Unlike the government’s high expectations for a fourth mobile carrier, realistically, there are not many entities capable of providing full telecommunications services." He added, "Large eUIM 5G operators like Naver or CJ OliveNetworks have some potential, but I understand they have little willingness." Some small and medium-sized enterprises also face limitations, as the nature of telecommunications services requires long-term investment, restricting eligibility to companies with sufficient capital.
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