Ministry of Science and ICT: "4th Mobile Carrier Policy to be Reconsidered When Operators Agree"

Announcement of Research Team Results on Fourth Mobile Carrier Policy
Operators to Propose Frequency Allocation Announcements in New System
Improvements to Allocation System... Minimum Capital Requirements Specified

The government announced that it will reconsider the policy for the fourth mobile carrier when there is a willingness from operators to take on the challenge. By shifting from the existing government-led recruitment method to a system where operators propose the desired frequency bands, the government intends to actively reflect market demand.

On the 15th, the Ministry of Science and ICT (MSIT) announced the results of discussions by a research team on new operator policies at the Government Seoul Office. Since the cancellation of the selection of StageX as the mobile communication frequency allocation target corporation on July 31 last year, MSIT has been organizing a comprehensive research team of experts in telecommunications and radio waves.

MSIT plans to establish a new procedure for frequency allocation announcements so that operators can more easily challenge the fourth mobile carrier market. Previously, the government decided the frequency allocation bands and business models to attract operators. With the new procedure, operators can apply to the government for their desired frequency bands within the available frequency range, even if it is not the previously recruited 28 GHz band.

Choi Byung-taek, Director of the Radio Policy Bureau at MSIT, said, "Currently, the Radio Waves Act does not include such procedures, so amendments are necessary," adding, "We will finalize the details through public hearings."

While maintaining the registration system for period telecommunications businesses, improvements will also be made to the frequency allocation system. Last year, the fourth mobile carrier was recruited for the first time under a registration system rather than a licensing system, but the government canceled the qualification of StageX, which was selected as the frequency allocation target corporation, citing failure to meet necessary requirements.

After reviewing the frequency allocation system, MSIT identified issues such as ▲ bidders potentially submitting bids exceeding their payment capacity to eliminate competitors ▲ uncertainty in full payment of frequency allocation fees ▲ insufficient penalties for corporations with allocation cancellations due to fault.

Accordingly, the government will require operators to meet capital requirements above the minimum competitive price proposed through improvements to the frequency allocation system to participate in auctions. For corporations yet to be established, only legally binding documents such as investment commitment letters from participating shareholders can be submitted.

Additionally, full lump-sum payment of frequency allocation fees will be the principle. If installment payment is desired, legally binding documents guaranteeing payment by participating shareholders or investors must be submitted.

To prevent reckless market entry attempts, a new measure will be introduced to restrict operators with fault-based allocation cancellations from participating in frequency allocations for the relevant bands.

MSIT’s policy also appears to be mindful of future changes in the telecommunications market. Ryu Jae-myung, Director of the Network Policy Office at MSIT, said, "In the era of autonomous driving or satellites, there is a possibility of attempts in ways other than the typical telecommunications services traditionally imagined," adding, "We want to prepare conditions so that when attempts to enter the market with new possibilities arise, the government can promptly supply frequencies."

Meanwhile, on the same day, MSIT also announced measures to strengthen the competitiveness of MVNOs, including significant reductions in wholesale prices, support for full MVNOs (affordable phone operators with their own facilities), and plans to secure trust in the affordable phone market.