South Korea to revoke license of fourth mobile carrier over funding issue

The country's Ministry of Science and ICT is reportedly going to reevaluate the overall auction process before deciding whether to reopen an auction for the 28GHz 5G frequency band.

Gigi Onag, Senior Editor, APAC

June 17, 2024

2 Min Read
South Korea flag
Source: Daniel Bernard/Unsplash

South Korea's science ministry reportedly will cancel the license of new mobile operator Stage X for failing to pay the required paid-in capital amounting to 205 billion Korean won ($149 million).

In January this year, the country's Ministry of Science and ICT (MSIT) awarded the spectrum in the 28GHz frequency to the little-known company after an auction, making Stage X the country's fourth mobile carrier after SK Telecom, KT and LG Plus.

Stage X is backed by messaging and online content giant Kakao, which led a consortium comprising its own Stage Five business and other unidentified companies. Stage X paid KRW430.1 billion ($320 million) for the spectrum, outbidding local telco Sejong Telecom. The company was going to build its own 5G network with the 28GHz spectrum.

Citing Second Vice Science Minister Kang Do-hyun, Yonhap News Agency reported that the MSIT will revoke Stage X's mobile carrier license for "failure to secure paid-in capital and meet other requirements."

The news agency added that Stage X has been plagued by funding questions because tens of millions of dollars are needed to build a nationwide telecom network.

Stage X is required to build 6,000 base stations nationwide – which is the mandated installation standard for the 28GHz frequency network. In February, the company said it will be investing KRW612.8 billion ($462 million) to build the 5G network basestations.

Related:Kakao wins 28GHz auction to become South Korea's fourth operator

Questions over company's ownership structure

Besides not being able to fully raise the $149 million paid-in capital, the MIST reportedly said both the composition of the company's stockholders and the ownership structure among the shareholders were different from what Stage X initially reported.

Quoting ministry sources, Yonhap News Agency said only one of the six main shareholders – each of which owns more than 5% percent of Stage X – paid some of the required capital.

Meanwhile, it added that the ministry will set in motion the procedure to revoke the license of Stage X before formally canceling it. Because of this case, the ministry reportedly plans to reevaluate the overall frequency auction process and related problems before deciding whether to reopen an auction for the 5G frequency band.

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Asia

About the Author(s)

Gigi Onag

Senior Editor, APAC, Light Reading

Gigi Onag is Senior Editor, APAC, Light Reading. She has been a technology journalist for more than 15 years, covering various aspects of enterprise IT across Asia-Pacific.

She started with regional IT publications under CMP Asia (now Informa), including Asia Computer Weekly, Intelligent Enterprise Asia and Network Computing Asia and Teledotcom Asia. This was followed by stints with Computerworld Hong Kong and sister publications FutureIoT and FutureCIO. She had contributed articles to South China Morning Post, TechTarget and PC Market among others.

She interspersed her career as a technology editor with a brief sojourn into public relations before returning to journalism, joining the editorial team of Mix Magazine, a MICE publication and its sister publication Business Traveller Asia Pacific.

Gigi is based in Hong Kong and is keen to delve deeper into the region’s wide wild world of telecoms.

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