South Korea’s Ministry of Science and ICT has announced infrastructure-sharing measures to enable the country’s three cellcos to launch commercial 5G services early next year, but operators are already arguing over pricing details.
One of the key differences between 4G and 5G is cell densification for urban areas. Operators can’t just reuse existing 4G sites – they need lots of additional sites to support mmWave bands that offer more capacity but have a far shorter range than the sub 6 GHz bands typically used for cellular networks now. This raises the question of whether cellcos should be fighting each other for real estate to build duplicate infrastructure, or build a shared infrastructure that all players can use.
According to the Korea Times, the measures introduced by the ministry call for joint construction of new facilities and enable operators to install cables and repeaters on government-owned facilities such as streetlamps and traffic lights. The ministry also wants cellcos to share their existing infrastructure facilities for 5G for a fee.
That last one has become a bone of contention for cellcos who are concerned about how much a given facilities owner can charge the competition and how prices should be calculated. Put simply, reports the Times, incumbent telco KT – which owns the most telecoms facilities in the nation – wants the price to be set high enough to cover the cost of its network investment to date:
A KT official said, “We will cooperate with the government and other companies to effectively establish a 5G network,” but added, “Consistent attention and support is necessary to calculate optimal prices considering our investment.”
Needless to say, rival operators SK Telecom and LG Uplus would just as soon see prices set lower.
Ultimately it’s up to the ministry, which said it has asked the Korea Information Society Development Institute (KISDI) to study the issue and come up with a formula for calculating prices that balances everyone’s concerns, the Times reports:
“Price issues will be settled before firms begin their investment in 5G facilities so companies have no difficulty in the establishment of a 5G network,” a ministry official said, Wednesday.
The ministry expects the measures will enable 5G services to be launched commercially in South Korea by March 2019.