South Korean cellcos object to auction reserve price

08 Mar 2016

South Korea's mobile operators are reportedly teaming up to oppose the government's decision to set a record high reserve price for next month's spectrum auctions.

SK Telecom, KT and LG U+ have entered into “a hostile yet symbiotic relationship over the situation,” the Korea Timessaid.

The operators are reportedly in consensus that the decision is likely to weaken their incentives to invest and hold back growth momentum in the telecom market.

Telecom ministry MISP has set a floor price for a five-year license on the 2100-MHz band at 381.6 billion won ($316.9 million), the highest reserve price for any spectrum put up for auction in the market.

In all, the reserve price for all 140 MHz of spectrum being put up for auction is over 2.5 trillion won.

Operators have complained at the high prices, considering that the auction comes at a time when operators are investing to prepare for 5G rollouts.

LG U+ has also objected to the short term of the 2100-MHz license compared to the 10 year licenses for the remaining spectrum. The company has asserted that five years is not long enough for operators to realize a profit return on an investment in a license and network rollout.

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