The encyclopedia · Software & IT · Strategic decision · 2018
Korea's first 5G auction raised ₩3.6tn with caps that kept every carrier in the game
Seoul auctioned 280MHz of 3.5GHz and 2.4GHz of 28GHz, capping each carrier at 100MHz — total ₩3.61tn, and no winner could hoard the band.
Ministry of Science and ICT (South Korea) · SK Telecom · KT Corp · LG Uplus
The solution
Korea wanted to be first to commercial 5G, so in June 2018 the Ministry of Science and ICT held the country's first 5G spectrum auction: 280 MHz in the 3.5 GHz band and 2,400 MHz in the 28 GHz band.
The auction opened at ₩3.3tn, with 28 blocks of 3.5 GHz (10-year licenses, minimum ₩2.65tn) and 24 blocks of 28 GHz (5-year, minimum ₩621.6bn). A 100 MHz cap in 3.5 GHz meant no carrier could corner the band that matters for coverage.
On day one the three carriers each took eight 28 GHz blocks at the ₩25.9bn opening price; the 3.5 GHz contest ran a second day until LG Uplus dropped its target to 80 MHz. Total bids: ₩3.61tn ($3.26bn) — below the ₩4tn some had forecast.
Why it worked
- The cap forced the two giants to split the best band instead of one buying all.
- Two-stage design let the less scarce band clear instantly at the reserve.
- Predictable opening prices kept small bidders at the table.
- The auction funded the network push without a subsidy.
What can be applied
When allocating a scarce common resource, a per-player cap protects competition, and an auction still converts the scarcity into public revenue.
Aftermath
The winners launched the world's first commercial 5G services in April 2019. Analysts later debated whether operators' spectrum bills and network costs would ever pay off, but Korea kept its first-mover position.
Sources
- S. Korean mobile carriers pay 3.6 tln won at 5G spectrum auction
- SKT, KT win 100MHz in 3.5-GHz spectrum at 5G auction
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