The article discusses the controversy surrounding the reallocation of 3G and LTE frequencies in South Korea, focusing on the disparity in fees among telecom companies. Similar to a scenario where businesses A and B rent spaces in the same building but pay significantly different rents due to historical contracts, SK Telecom (SKT) and LG Uplus find themselves in a comparable situation regarding frequency allocation fees.
In 2021, both companies were grouped under the same frequency band (C Group). However, SKT, which acquired its frequency block through a 2016 auction, pays double what LG Uplus pays, as LG Uplus received a 27.5% discount during the 2021 reallocation.
The Ministry of Science and ICT plans to finalize reallocation policies by the end of the month. The reallocation involves a total of 370MHz, affecting SK Telecom (155MHz), KT (115MHz), and LG Uplus (100MHz).
The discussion highlights the economic value of LTE frequencies, which is declining as the adoption of 5G increases. The number of LTE subscribers has dropped by 60%, and LTE traffic fell 58% between 2021 and 2025.
SK Telecom argues for a fairer pricing approach in the upcoming reallocations, while LG Uplus insists that current pricing should remain based on the latest confirmed allocation fees and reflect the economic conditions at the time of allocation. LG Uplus also highlights that the economic value of frequencies can differ due to factors like allocation circumstances and usable technology at different times, making indiscriminate price parity inappropriate.
This ongoing debate underscores the challenge of balancing historic agreements with current market dynamics and technology advancements in frequency allocation.