In the future, the entry threshold for the 4th mobile telecommunications (new telecommunications) operator is expected to increase. Only corporations with capital exceeding the minimum competitive price (starting bid) proposed by the government during new frequency auctions will be allowed to participate, and the allocation fee must also be paid in full at once. This measure is to prevent cases like the StageX incident, where operator selection was canceled due to financial soundness issues.
The Ministry of Science and ICT held a public hearing on the 28th and released the draft of the 'Frequency Allocation System Improvement Plan.' This proposal was prepared after discussions with experts following the StageX incident in July of last year, and the government plans to promote amendments to the Radio Waves Act in the first half of this year.
According to the improvement plan, the principle is that the frequency allocation fee must be paid in full at once, but partitioning is allowed if legal binding documents from investors are submitted. Additionally, only corporations with capital exceeding the starting bid will be allowed to participate in the new mobile telecommunications market, and consortium corporations must submit investment commitment letters. Currently, there are no separate capital requirements.
StageX was selected as a candidate for frequency allocation at 28㎓ for 5G but had its selection canceled due to failing to secure capital of 205 billion won. In response, the government plans to strengthen the verification of operators' capacity to pay the frequency allocation fees. Looking at international examples, India requires new operators to have a minimum net worth of 10 billion rupees (approximately 1.5 trillion won), while Singapore examines business plans and financial structures.
The government also plans to improve the inefficiency of frequency auctions. Previously, only existing telecommunications companies using the frequency could apply for allocation, but in the future, all operators will have the opportunity to request frequency allocation. Additionally, if the allocated corporate entity is canceled, the deposit will be forfeited, and future participation qualifications will be limited, while a system will be introduced to automatically allocate to the next highest bidder to reduce additional auction expenses.
Furthermore, newly established corporations without issued shares are considering a plan to require approval from the Minister of Science and ICT when changing shareholder composition and financial structure. The government plans to start the legislative amendment process in the first half of this year, reflecting various opinions.