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Korea’s bandwidth bidding war expected to cost mobile carriers more than US$2 bil.

Korea’s bandwidth bidding war expected to cost mobile carriers more than US$2 bil.


A bidding war has begun among Korea’s three
biggest telecommunications companies to secure the best bandwidth for faster and broader
data services. The total cost of the auction, which could
last over a week, could reach up to 3 billion U.S. dollars.
Kwon Jang-ho reports. Korea’s three major mobile carriers — SK
Telecom, KT and LG UPlus — are set to battle it out to secure premium operating frequency
bands put up for auction by the government. Five blocks of bandwidth are up for grabs,
worth over 2 billion U.S. dollars. The auction will take place in two stages.
First, there will be 50 rounds of bids, and if a winner is not found by then, one will
be chosen through a secret sealed auction. The whole process could take up to eight days.
The two-point-one-gigahertz bandwidth, also known as the “golden spectrum,” is expected
to attract the most attention. It is used for super-fast LTE services and
is likely to be used for the next generation 5G services in the near future.
This block alone could end up drawing bids of almost a billion U.S. dollars.
SK Telecom, which previously owned the block, will be looking to secure it again, as it
has already invested 750 million dollars into network facilities for that bandwidth. Before 2011, the government would dole out
the bandwidth, but it was later accused of favoring certain carriers.
Now, however, the auction process has also come under fire, due to the huge costs that
have come from the bidding wars. Still, as the Korean public’s appetite for
mobile data continues to grow, the carriers have been left with no choice.
Data usage for mobile devices in Korea has increased by 600 percent in the past three
years and securing the best frequency to provide the fastest service is seen as key for the
ultra-competitive mobile market in Korea. Kwon Jang-ho, Arirang News.

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