Korea - Regulator is preparing for the first ever auction of spectrum for 3G networks

[joongang daily] This month, there will be a very intriguing, important, yet controversial auction in the Korean mobile industry.

The Korea Communications Commission - the country’s telecommunications regulator - will hold an auction of slots in three mobile frequency bands. They are: 2.1-gigahertz (GHz) band, 1.8 GHz band and 800 MHz band.

It will be the first such auction in Korean mobile telecommunication market history.

For mobile carriers, it’s a matter of life-and-death. Securing vital spectrum slots are a must to meet surging data demand from smartphone and tablet PC users and to develop future wireless network technologies like fourth-generation (4G) technologies, also known as long-term revolution.

Last Thursday, the KCC wrapped up the applications for the auction. As expected all three carriers applied, promising heated competition this scorching summer.

It’s a war for 1.8 GHz

LG U+, the country’s smallest mobile carrier, is the sole bidder for the much-sought after 2.1 GHz band. Last month, the KCC declared that it would ban SK Telecom and KT - the No.1 and No.2 in the market - from bidding for the band to prevent a possible monopoly.

The 2.1 GHz is thought to be the “golden” band for 3G service and thus, crucial for smartphone services. SK Telecom and KT already own licenses for the band, while LG U+ has been the only player in the market without a license for the band.

So the bloodiest battle will take place in bidding for the 1.8 GHz band and the 800 MHz band.

But the problem is both SK Telecom and KT want the 1.8GHz.

The available slot in 1.8 GHz is twice that of 800MHz. The size of the frequency bands is important since the more voice and data traffic they can handle, the more business for the carriers.

Also, about 20 mobile carriers in Europe and five in the U.S. and Asia have chosen 1.8 GHz as the frequency band for their 4G mobile telecommunication service.

“To strengthen our competitiveness in future business, this band is a must-have. That is why no matter how substantial the sacrifice may be, we must bet everything on this,” said an SK Telecom executive.

Analysts fear Winner’s Curse

A telecom auction that’s going to cost a bundle