Cancellation of 5G 28GHz Frequency Allocation... 5G National Network in Limbo

Gyeonggi Provincial Office of Education Closely Watching Government Decision
All Three Telecom Companies Face Variables if 28GHz Project Fails

[Asia Economy Reporter Cha Min-young] As the government takes a strong stance by canceling the 5G 28GHz frequency allocation to the three major telecom companies, the selection of the 5G national network operator by the Gyeonggi Provincial Office of Education, originally scheduled for this year, is also expected to be delayed. Since the prior announcement included the mandatory installation of 28GHz equipment, there are not enough qualified operators, causing disruptions to the project itself.

Aftermath of 28GHz Frequency Allocation Cancellation Causes Setbacks in 5G National Network Construction

According to the telecommunications industry on the 9th, the Request for Proposal (RFP) for building the 5G national network for smart work, which the Gyeonggi Provincial Office of Education pre-announced on the government procurement portal in November, included the mandatory installation of 28GHz equipment. The proposal explicitly requires detailed plans for installing 28GHz dedicated base stations and small cell equipment within offices, as well as securing coverage and performance. Installation of modems compatible with both the 5G 3.5GHz band and the 28GHz band was included as a mandatory requirement.

The total project cost is approximately 5.7 billion KRW, with the project period running from the contract date until the end of June 2028. The Gyeonggi Provincial Office of Education plans to establish a 5G national network-based work environment at the newly constructed Gwanggyo office building, expected to be completed in the first half of next year. Although the original completion schedule at the end of December has been delayed, allowing some leeway, the operator selection process for telecom companies must be finalized first.

However, last month, the Ministry of Science and ICT took a tough stance by canceling the 5G 28GHz frequency allocation for LG Uplus and KT after a three-year performance review. SK Telecom, the only company spared from cancellation, received a six-month reduction in its usage period, which is 10% of the five-year term. SK Telecom must meet the condition of installing 15,000 devices by May 2023, before reapplying for reassignment. If SK Telecom fails to meet the Ministry’s conditions, it will have to return the frequency like its competitors. Although the government has left the door open for new operators, expecting participation in the 5G national network project is difficult.

Speculation That 28GHz Dedicated Equipment Installation Requirement May Be Removed from Operator Obligations

This 5G national network project is a long-term plan spanning five years until 2028, making the situation frustrating for the Gyeonggi Provincial Office of Education. The office is focusing on the hearing results expected in mid-month for KT and LG Uplus. A Gyeonggi Provincial Office of Education official said, "The hearing results will come out this month, but we believe we need to monitor SK Telecom’s situation next year as well," adding, "We are continuously communicating with the Ministry of Science and ICT and will actively cooperate with government policy directions."

There is also speculation that the mandatory installation of 28GHz dedicated base stations and small cell equipment may be removed from the obligations in the main announcement of the 5G national network project. If this happens, operator selection would become easier, but some analysts argue it would be unfair compared to the previously conducted 5G government network construction project. In the '2022 5G Government Network Construction Pilot Project' led by the Ministry of the Interior and Safety, KT was the sole bidder for the Ministry of Science and ICT and the Korean Intellectual Property Office group, while only SK Telecom and KT participated in the Ministry of Foreign Affairs and the Ministry of Personnel Management group. The former was canceled due to lack of competition from a single bidder.

The 5G national network project aims to replace the existing wired PC access environment with a wireless network-based environment. Using a dedicated wireless network provides security advantages. Individuals will be able to perform official duties using mobile devices such as laptops and tablet PCs equipped with 5G modems. This project is also one of the core initiatives of the current government’s Digital Platform Government construction. The project involves cooperation among the Ministry of the Interior and Safety, the National Intelligence Service Gyeonggi Branch, and the National Information Society Agency. After completing the pilot project this year, the Ministry of the Interior and Safety plans to fully establish 5G-based work environments in four government complex buildings and 17 metropolitan cities and provinces by 2025. According to the originally established Information Strategy Plan (ISP), the main project is expected to cost approximately 332.2 billion KRW. The specific budget will be finalized later through preliminary feasibility studies and other procedures.