Fourth Mobile Carrier Candidate Confirmed... StageX, MyMobile, and Sejong Telecom in a Three-Way Battle

-Ministry of Science and ICT closes nationwide 28GHz band frequency allocation applications
-Three applicants: MyMobile, StageX, Sejong Telecom
-No large corporations applied... Doubts over meeting network construction obligations

The candidate for the fourth mobile carrier, which will break the monopoly of the three major telecom companies, has been confirmed. Three companies?MyMobile (Mirae Mobile Consortium), StageX (StageFive Consortium), and Sejong Telecom?are competing for the nationwide allocation of the 28 GHz band frequency. If they win the bidding competition, these companies will transform from 'MVNO operators' into the fourth mobile carrier. However, since these are mid-sized companies without abundant financial resources, questions have been raised about whether they can grow into telecom operators comparable to the existing three major companies: SK Telecom, KT, and LG Uplus.

StageX, MyMobile, Sejong Telecom 'Three-Way Battle'

The Ministry of Science and ICT announced on the 19th that after closing the application for the 26.5?27.3 GHz band (800 MHz bandwidth, anchor frequency 700 MHz band with 20 MHz bandwidth) for mobile telecommunications (IMT), three entities?Sejong Telecom, StageX, and MyMobile Consortium?applied for nationwide frequency allocation.

StageX is a corporation jointly established by StageFive, which operates an MVNO business, and Shinhan Investment Corp. Over the next three years, it plans to build more than 6,000 base stations across 90 hotspots and offer B2B and B2C services such as smart hospitals and immersive content. Currently, there are no 5G 28 GHz-compatible devices in Korea, but StageX is preparing to expand its lineup of mid-to-low-priced 28 GHz-supported devices by forming a strategic partnership with Foxconn’s mobile device manufacturing affiliates.

Sejong Telecom is known to utilize the 28 GHz frequency for B2B purposes. Sejong Telecom has experience operating MVNO and Eum 5G (5G specialized network). It also previously attempted to become the fourth mobile carrier in 2015 but was unsuccessful. A Sejong Telecom official stated, "We applied for frequency allocation in response to government policy and as part of our strategy to secure future growth engines. We see this as a new opportunity and expect continuous government interest."

The Mirae Mobile Consortium 'MyMobile,' which has long expressed its intention to challenge as the fourth mobile carrier, also succeeded in applying for the allocation. Earlier that day, MyMobile visited the Ministry of Science and ICT building at 1 p.m., but faced difficulties due to some document issues related to the bidder’s insurance application. However, before the deadline, they reissued the bid bond under the consortium’s name and were able to formally submit the application documents.

With the frequency allocation application period closed, the Ministry of Science and ICT plans to review whether the applicant corporations have any disqualifications under the Radio Waves Act and the Telecommunications Business Act, notify them of their eligibility, and then commence the frequency auction.

Choi Woo-hyuk, Director of the Radio Policy Bureau at the Ministry of Science and ICT, said, "All the applicant corporations lack experience in frequency auctions, so we will provide sufficient explanation time to ensure smooth participation. We plan to manage the auction fairly to foster healthy competition."

No Large Corporations Applied... Can 28 GHz Be Trusted?

The 28 GHz millimeter-wave frequency band has advantages over the 3.5 GHz mid-band used by domestic telecom companies for 5G services, such as wider bandwidth and faster speeds. However, 28 GHz has drawbacks, including a shorter radio wave reach and poor penetration through walls and buildings. To build a network over the same area, more base stations and equipment are required compared to 3.5 GHz. The industry estimates that building about 300 28 GHz hotspots will cost approximately 300 billion KRW.

Due to the astronomical costs involved, the Ministry of Science and ICT hoped for participation from financially robust financial institutions or large corporations. The market entry barriers were also lowered. According to the government's frequency allocation plan, the minimum competitive price for new entrants to participate in the frequency auction is 74 billion KRW, and the network base stations to be built by the third year are 6,000 units. This is significantly lower than the 270.2 billion KRW minimum competitive price and 15,000 base stations required when the three major carriers were allocated 5G frequencies in 2018.

However, due to the strong perception of the telecom industry as a regulated sector, financial institutions and large corporations have been reluctant to enter the market. None of the large corporations previously mentioned?Naver, Kakao, Shinsegae, Hanwha?participated in this 28 GHz frequency allocation application. Although StageFive was recently part of the Kakao group, a large corporation, it was excluded from the Kakao group after signing a share sale agreement involving a change of the largest shareholder with Kakao Investment the day before.

The industry also questions whether new entrants, rather than large corporations, can fulfill the network construction obligations. The three telecom companies that previously received 28 GHz frequency allocations were required to build 15,000 base stations each, but over three years, SK Telecom built 1,605, KT 1,586, and LG Uplus 1,868 base stations, with all three companies achieving only about a 10% fulfillment rate.

A telecom industry insider said, "There are no suitable uses for 28 GHz, and besides the allocation cost, enormous funds are needed for base station installation and operation. It’s not easy. Although the network construction obligation has been reduced, the increasing installation and maintenance costs each year remain burdensome. Eventually, there will come a moment when they cannot endure the profitability deterioration and give up," expressing concern.

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