Korea Spectrum Auction Unloads More 1800/2600 MHz Spectrum

Spectrum AuctionThe latest round of spectrum auctions in Korea concluded with KT acquiring precious 15 MHz of 1.8 GHz spectrum adjacent to its existing band. The country’s largest operator, SK Telecom acquired 35 MHz in the 1.8 GHz band but has to give up some other spectrum in return. In the meantime, the smallest operator, LG U+, acquired 40 MHz in the 2.6 GHz spectrum. All results are summarized in the table below.

Company

Band (MHz)

Bandwidth

Price (KRW, bn)

Price (USD, m)

Minimum Bid (KRW, bn)

$/MHz-PoP

KT Corp

1800

15 MHz

900

828.7

289

1.10

SK Telecom

1800

35 MHz

1050

966.8

674

0.55

LG U+

2600

40 MHz

479

441.1

479

0.22

The question being asked about this auction is: did KT overpay for the benefit of having adjacent spectrum? Combined with its existing 1800 MHz holdings, KT now has 20 MHz of continuous downlink spectrum. The uplink remains broken up in 10 and 5 MHz bands, but effectively 15 MHz in the uplink. SK Telecom will have similar allocation which keeps the top two operators on equal footing in terms of spectrum holdings.

The carriers can use the new spectrum for LTE, and more specifically LTE-Advanced which is already being rolled out with carrier aggregation of different frequency bands (combining 1800/800 MHz for SK Telecom, 1800/900 MHz for KT, and 800/2100 MHz for LGU+).

There is something here to note: it’s clear that carrier aggregation will be a common feature and it’s only a matter of time before other operator around the world follow suite of the market leaders in Korea. Considering the high subscriber density and demand for mobile broadband in Korea, operators have chosen carrier aggregation as a first step in the LTE-Advanced roadmap to grow the supply of capacity.

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About Frank Rayal
Telecom industry management consultant.

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