[The Editors' Verdict] A Paradigm Shift Is Needed for the Fourth Mobile Carrier

After President Yoon Suk-yeol instructed the dissolution of the oligopoly system, stating that finance and telecommunications have a "strong public goods nature," discussions on establishing a fourth mobile carrier are in full swing. The intention is to nurture a ‘catfish’ that can compete with the existing three telecom companies to induce a reduction in communication fees. This is not the first time the fourth mobile carrier has been discussed. There have been as many as seven attempts so far, all of which failed. Even this year, skeptical views prevail. With the current approach the government is considering, the fourth mobile carrier is out of the question this year as well.

After the president’s directive, the Ministry of Science and ICT, the responsible department, seems to be under urgent pressure. They say they will support drastically reducing network construction costs, as well as assist with device launches and policy fund loans. There are also reports that the government is directly approaching candidate companies such as Naver, Coupang, Kakao, and Shinsegae to persuade them.

However, there will not be many companies willing to enter the business. The important reason is that it is not profitable. No matter how costly it is, if the business potential is sufficient, everyone would jump in.

The core of mobile communication services lies in the frequency bands. The government plans to allocate the 28 GHz band to the fourth mobile carrier. The existing telecom companies did not properly invest even after being assigned this frequency. The government eventually reclaimed this frequency from KT and LG Uplus last year. The frequency band to be allocated to the fourth mobile carrier is exactly this band.

The reason existing mobile carriers did not invest is that it was naturally not useful. When others do not use an item and try to resell it, the reason must be examined first. Buying something just because it is cheap can lead to a loss.

The high-frequency bands including 28 GHz are called millimeter waves. Compared to mid- and low-frequency bands, data transmission speeds are faster, but there is a limitation in that signals cannot be sent far, resulting in high investment costs. In fact, no smartphones supporting 28 GHz have even been released domestically.

The government says it will install networks mainly in hotspots such as stadiums where people gather, and allow the rest to use the networks of the existing three telecom companies. This would reduce network construction costs to about 300 billion KRW. However, from a company’s perspective, if this is the case, there is no need to obtain a ‘facilities-based telecommunications business’ license burdened with government regulations and conditions. A less regulated MVNO (Mobile Virtual Network Operator) would suffice.

So what should the government do? First of all, the approach is wrong. The impatience to lower communication fees by introducing a fourth mobile carrier must be abandoned. If one side is pressuring to lower fees, how many companies would willingly enter that market?

The fixed idea that mobile phone services must be provided using 28 GHz must also be boldly discarded. In a situation where there are no proper devices, it is highly unlikely that any company would enter to compete with existing mobile carriers. Moreover, mobile phone services have been stagnant for years, so there is no incentive for new entrants. Existing telecom companies are also moving towards ‘beyond telecommunications’ strategies.

If the government truly wants a fourth mobile carrier, it needs to boldly accept private sector creative ideas. Instead of setting restrictions and limits on services, why not invite proposals on how to utilize 28 GHz? Who knows? An innovation no one has thought of might emerge.

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