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LG Uplus acquires most wanted radio spectrum

Company plans to use the 2.1 gigahertz radio spectrum late next year


LG Uplus is enjoying a positive outlook after it was made official Wednesday that the firm would take home the 2.1 gigahertz radio spectrum to be used for fourth generation network technologies.

The Korea Communications Commission, the state telecom regulator, announced that LG Uplus, which was the only player to apply for that particular radio spectrum, got the 20 megahertz bandwidth of the 2.1 gigahertz range for 445.5 billion won ($414.75 million) in the country’s first wireless broadband auction. The license for the bandwidth will be given for 10 years.

The KCC had ruled out the other two leading mobile carriers ― SK Telecom and KT Corp. ― from participating in that auction, allowing LG Uplus to obtain it for the minimum bidding price suggested by the government.

The 2.1 gigahertz radio spectrum was eyed by all three telecoms because it would be used for 3G communication services as well as 4G LTE services. It is also a spectrum widely used in other countries, which indicates that it could give the firm an upper hand in its smartphone line-up.

“We’re currently preparing the 4G Long Term Evolution services with the 20 megahertz band in the 800 megahertz range and we’re projecting to use the 2.1 gigahertz radio spectrum by late next year, considering the increasing demand coming from smartphone owners,” said an LG Uplus official.

He also said the 2.1 gigahertz radio spectrum will be mainly used in metropolitan areas and major cities, where there is a lot of data traffic. The company expects it will be meet demand with its current 800 megahertz radio spectrum until next year, he added.

Following the announcement, the company’s stock price saw a rise with industry experts presenting a positive outlook for the firm.

“LG Uplus is currently planning to take the lead in the 4G market by injecting large investments in the field. The investment in projects related to the use of 2.1 gigahertz wireless broadband spectrum could see a dip in profits in the short term, but it is eventually to give an optimistic result for the firm since it would enable the firm to compete on similar grounds with its rivals in the long term,” said Park Jong-soo, a senior analyst at Hanwha Securities.

Currently, industry leader SKT has up to 60 megahertz band of the 2.1 gigahertz range, while KT, the No. 2 player in wireless telecommunication service, has 40 megahertz band. LG Uplus did not own any bandwidth in that particular frequency range until now.

By Cho Ji-hyun (sharon@heraldcorp.com)
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