South Korean cellcos raise issues over spectrum renewal costs

South Korea’s three mobile network operators (MNOs) – SK Telecom, KT Corp and LG Uplus – are reportedly calling on the government to revise the methodology for calculating the cost of extending their respective 2G/3G/4G concessions.

According to The Korea Times, the three cellcos are set to clash with the authorities over the costs of renewing concessions that are set to expire in June 2021, with a renegotiation for an extension of these licences expected to get underway next month. The report claims that a conflict has arisen over the government’s price assessment procedures, which sets the cost of spectrum licence renewals in consideration of operator’s expected total sales. However, the trio of cellular providers are understood to be pressing for a more concrete calculation standard, arguing that it is difficult for them to estimate total sales figures for a licence period that can run for between five and ten years.

Regarding this matter, KT CEO Ku Hyeon-mo was cited as saying to ICT Minister Choi Ki-young at a meeting last month: ‘We are investing heavily in the 5G network to revitalise the economy from COVID-19, but if the frequency band reassignment cost is excessive it would become a heavier burden … Please revise price-setting procedures so it would become more reasonable.’

―Comms Update