Frequency Reallocation to Encourage Investment in 5G SA Network Development by the Three Major Telecom Companies
The South Korean government has announced plans to use the reallocation of 3G and LTE frequencies, whose usage expiration is approaching next year, as a condition to mandate the introduction of the 5G standalone mode (SA). This move aims to prompt investment in infrastructure by the three major telecom operators, given the slow transition to 5G SA amid the process of 6G commercialization.
On December 1, the Ministry of Science and ICT held a ‘Mobile Network Frequency Reallocation Detailed Policy Plan Public Briefing’ at the IT Square in Gangnam, Seoul. Nam Young-jun, the head of the Ministry’s frequency policy division, emphasized the necessity of providing 5G SA services for network enhancement and intends to make this a mandatory requirement.
Additionally, to address the issue of indoor 5G quality, investments in 5G indoor base stations are suggested as a discount option for frequency reallocation fees. If the telecom companies establish more than 20,000 indoor base stations, the combined allocation fee would be approximately 2.9 trillion won, which is 200 billion won less than if fewer than 10,000 stations are built.
The government reiterated its principle of basing fees on existing auction prices. However, it proposed a roughly 15% reduction in adjustment prices to reflect the diminished value of LTE frequencies currently used in 5G non-standalone mode (NSA) as 5G SA becomes more widespread.
Previously, SK Telecom and LG Uplus experienced conflicts over the considerable difference in fee burdens for reallocating the 2.6GHz band they each use. SK Telecom argued that they are paying more than twice what LG Uplus does for frequencies of equivalent value and called for a correction, while LG Uplus emphasized the need to adhere to rules and principles based on the most recent allocation fees.
Moreover, the government presented an option to shorten the usage period by one year, post-2030 6G commercialization, for one of the blocks either in the 2.1GHz or 2.6GHz bands, taking into account reduced frequency usage. For 3G frequencies, if service discontinuation is approved in the future, operators will be given the choice of frequency usage.
The frequency reallocation covers a total bandwidth of 370MHz, including 20MHz for 3G and 350MHz for LTE. The government plans to finalize the policy within the year after collecting feedback from operators through the public briefing.