Allocation applications accepted until June 4, auction held on June 15

The frequency auction for the world's first 5G commercialization will be held on June 15.

The Ministry of Science and ICT announced that it will accept applications for 5G frequency allocation until the 4th of next month and hold an auction on the 15th. Commercialization is expected to begin in March of next year.

With the goal of supplying the maximum allocatable frequency bandwidth at once, a total of 2,680 MHz bandwidth is supplied, consisting of 280 MHz in the 3.5 GHz band (3,420–3,700 MHz) and 2,400 MHz in the 28 GHz band (26.5–28.9 GHz).

Regarding the 20 MHz bandwidth of the 3.5 GHz band that was excluded from this auction due to interference issues, we plan to form an expert research team with telecommunication operators immediately after the auction to review the analysis methods and timing of the interference issues.

Considering that this is the first frequency supply to launch 5th generation mobile communication, the total amount of frequency that can be allocated to one company is limited to 100 MHz for the 3.5 GHz band and 1,000 MHz for the 28 GHz band.

In determining the total limit level, the Ministry of Science and ICT focused on providing opportunities for all operators to attempt 5th generation innovation in a similar environment at the dawn of a new generation. It was also stated that the readiness of the initial equipment and terminal ecosystem, as well as domestic and international trends in 5th generation technology discussions, were taken into consideration.

Given that this auction imposed strict total quantity limits considering it is the starting frequency for 5G, if additional 5G frequencies are supplied in the future, each operator [will respond to] traffic increase We plan to relax the total limit to a level that allows us to secure as much frequency as is necessary to respond.

The 3.5 GHz band with a bandwidth of 280 MHz was set at 2.6544 trillion won for a usage period of 10 years, and the 28 GHz band with a bandwidth of 2,400 MHz was set at 621.6 billion won for a usage period of 5 years.

When determining the minimum competitive price, the Ministry of Science and ICT considered the environment of this 5G frequency auction, including the allocation price by mobile communication technology generation, past frequency auction results, and the supply of ultra-wideband/5G market outlook.

They stated that the allocation fee was determined at a level that allows for the imposition of an appropriate fee by balancing the recovery of costs for mobile carriers generating profits through the exclusive use of frequencies, which are a public good, with the possibility that the allocation fee could be passed on to communication charges.

In particular, the 28 GHz band is expected to have significant future market potential, but there is currently a great deal of uncertainty. To reduce the investment risk associated with this, it was decided to set the period to 5 years and significantly lower the minimum competitive price.

The auction method adopted the Clock auction method, which divides the auction into a stage for determining the amount of frequency (Stage 1) and a stage for determining the frequency location (Stage 2).

Specifically, to prevent the winner's curse from occurring due to an overheated competition for frequency allocation, the detailed auction rules were designed so that Stage 1 proceeds for up to 50 rounds within a maximum bid increment of 1%.

For the 3.5 GHz band, the standard number of base stations was set at 150,000, with a construction obligation of 15% over 3 years and 30% over 5 years, while for the 28 GHz band, the standard number of equipment was set at 100,000 units, with a construction obligation of 15% over 3 years.

Additionally, the Ministry of Science and ICT announced that, in order to support Korean SMEs in having growth opportunities in the 5G market, it has decided to include small cell base stations and repeaters subject to reporting in the standard base stations, and to include support measures for SME-specific products, such as small cells that do not fall under this category, in the frequency usage plan after consultation with telecommunication companies.

Minister Yoo Young-min of the Ministry of Science and ICT stated, “The government’s efforts to alleviate the burden of 5G investment costs for telecommunication operators—such as devising a plan for the joint use of essential facilities in preparation for 5G commercialization and supplying the maximum available bandwidth all at once rather than in multiple installments—were intended to provide the optimal environment for our companies to lead the 5G market.” He urged, “Starting with this frequency supply, I hope that all economic entities will devote themselves to ensuring that Korea leads the global market in the era of 5G mobile communication and the Fourth Industrial Revolution.”