Frequency Reallocation Confirmed at 3.17 to 3.77 Trillion Won

[Asia Economy Reporter Seulgina Jo] The government has finalized the reassignment price for 3G and LTE frequencies, which expire in June next year, at around 3.17 trillion to 3.77 trillion KRW. If the three mobile carriers build 120,000 5G base stations as planned, the frequency price will be 3.17 trillion KRW.

Although this is lower than the maximum 4.4 trillion KRW proposed by the government for a 5-year term at the early public briefing this month, it remains higher than the carriers' estimated figure of around 1.6 trillion KRW. The government is thus seen as having effectively upheld its original proposal of "around 3.2 trillion KRW."

The Ministry of Science and ICT announced on the 30th the “Detailed Policy Plan for Mobile Communication Frequency Reassignment” reflecting the results of the Radio Policy Advisory Committee and other consultations following the public briefing on the 17th. The ministry decided to reassign 310 MHz out of the 320 MHz frequency expiring in June next year to existing frequency users and finalized the detailed policy allowing reassignment applications six months before expiration.

The Ministry of Science and ICT explained, "To reduce market uncertainty and promote 5G transition, the frequency usage period was set flexibly based on service life cycle analysis to induce optimal frequency asset composition by carriers," adding, "The frequency assignment price policy was set to reflect appropriate compensation considering market conditions and 5G investments."

First, as LTE services enter decline by 2026, the usage period for the 2.6 GHz band was fixed at 5 years to secure 160 MHz of wideband 5G frequencies below 3 GHz. For other bands, carriers can flexibly choose usage periods between 5 and 7 years according to usage status and characteristics. However, considering the possibility of surplus frequencies due to early 5G transition, the usage period for one band per operator in the 2.1 GHz/2.6 GHz bands can be shortened after 3 years.

The reassignment price offers an option to reduce the fee the more 5G investment is made. If each carrier builds more than 120,000 5G base stations by 2022, the assignment price decreases to 3.17 trillion KRW. Conversely, if the number of 5G base stations is less than 120,000, the assignment price increases: 3.37 trillion KRW for 100,000 to less than 120,000 stations, 3.57 trillion KRW for 80,000 to less than 100,000 stations, and 3.77 trillion KRW for 60,000 to less than 80,000 stations.

The Ministry of Science and ICT initially proposed 150,000 5G base stations at the public briefing on the 17th but finalized 120,000 stations following carriers’ opinions that the former was unrealistic.

Oh Yong-su, Director of the Radio Policy Bureau at the Ministry of Science and ICT, emphasized, "The value of LTE frequencies remains valid at this point, so it is necessary to recover an appropriate level of compensation, and at the same time, value adjustment is needed as the value decreases with 5G investment."

He added, "This reassignment policy balances the overall national efficiency in frequency resource utilization, carriers’ investment conditions, and mobile users’ complaints," and expressed hope that "this reassignment policy will serve as an opportunity for Korea’s 5G competitiveness and service quality to take a leap forward."

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