If 5G is widely deployed, LTE frequency prices will be discounted... Industry calls it "unrealistic" (Comprehensive)

Government Presents Compromise Plan on 17th
Proposes Reallocation Price Linked to 5G
Minimum 3.2 Trillion Won if 150,000 Towers Installed

[Asia Economy Reporter Koo Chae-eun] All three mobile carriers have expressed opposition to the government's "compromise plan" to reduce the reassignment price (frequency value) linked to the amount of investment in 5G base stations.

This is because the plan sets an unrealistic goal (building 150,000 wireless stations), and if not achieved, carriers must pay expensive reassignment fees.

On the afternoon of the 17th, the Ministry of Science and ICT held a public briefing at COEX in Seoul and disclosed the frequency reassignment fee calculation method based on this plan.

The new compromise plan presented by the government on this day focuses on 5G network investment. The more 5G networks are deployed by 2022, the more the reassignment fee will be discounted.

The reassignment fees will be differentiated as follows based on the number of 5G wireless stations: approximately 3.9 trillion KRW for 60,000 to 90,000 stations, about 3.7 trillion KRW for 90,000 to 120,000 stations, and about 3.4 trillion KRW for 120,000 to less than 150,000 stations. To reduce the reassignment fee to the minimum amount (3.2 trillion KRW), the number of 5G wireless stations invested nationwide must exceed 150,000.

Regarding this government proposal, the mobile carriers unanimously stated that it is "unrealistic and unreasonable."

Lee Sang-heon, Head of Policy Development at SK Telecom, said, "We already paid the cost and bore the burden during the 5G frequency auction, so imposing additional obligations afterward is double charging." He added, "The figure of 150,000 stations is a scale that can be achieved only after steady investment in LTE for eight years, but setting a condition to build this by 2022 creates an unattainable standard and penalizes failure to meet it."

Kim Soon-yong, Executive Director of Policy Cooperation at KT, questioned, "It is problematic to impose new conditions on frequencies already assigned. After the auction is over, if additional conditions are imposed retroactively, which operator would participate in bidding with confidence?" He also said, "One 5G wireless station does not mean just one piece of equipment; at least two pieces of equipment are installed per station. The price of one piece of equipment is twice that of LTE. This is not realistic."

Kim Yoon-ho, Executive Director in charge of Fair Competition at LG Uplus, pointed out, "It costs 20 million KRW to build one 5G base station. For 100,000 stations, that amounts to 2 trillion KRW, and if the reassignment fee is added, it will inevitably cause a significant hit to the carriers' profitability." He mentioned, "Currently, 4G warehouses are large and 5G subscribers are few. In this situation, it would be better to link the reassignment fee to LTE quality maintenance or 5G traffic rather than the number of wireless stations."

This content was produced with the assistance of AI translation services.