Stage X will become Korea's fourth major mobile carrier

Stage X, backed by Kakao affiliate Stage Five, will become Korea's fourth major mobile carrier.

A mobile phone store at an electronics market in Seoul in January [YONHAP]

Korea's telecom industry, currently a three man's game among major mobile carriers SK Telecom, KT and LG Uplus, is expected to welcome a new player for the first time in 22 years.

Stage X, a consortium created by Kakao affiliate Stage Five, was selected to become the country's fourth mobile carrier after winning a bid to carry the 5G 28 gigahertz (GHz) spectrum, the Ministry of Science and ICT said Wednesday.

The consortium's bid of 430.1 billion won ($323 million) for the technology was approved by the ministry, edging out competitors My Mobile Consortium and Sejong Telecom.

The winning bid is five times larger than the starting price of 74.2 billion won. The final bid was widely expected to be in the 100 billion won range.

The announcement marks the government's eighth attempt since 2010 to create a fourth mobile carrier.

Mobile virtual network operator (MVNO) Stage Five created the Stage X consortium along with Shinhan Securities and other information technology companies. Stage X has reportedly secured an investment of 800 billion won from Shinhan Securities. The company is now required to build 6,000 base stations nationwide in three years and to implement measures to address frequency congestion and interference.

Stage X plans to launch both Business-to-Business (B2B) and business-to-customer (B2C) services. While the 28 GHz frequency band can deploy high-speed and low-latency 5G network services, it has limited range, as its waves are only able to travel a short distance, and its frequency is easily interrupted by physical obstructions.

The company plans to first establish its services in companies and organizations including universities, airports and hospitals before branching out.

While the addition of a new player to the mobile telecom market, currently monopolized by three companies, is expected to stimulate competition, the higher-than-expected winning bid price has some experts concerned about the project’s financial feasibility.

Stage X's main task will be to procure business. The three major mobile carriers won the same spectrum for slightly more than 200 billion won in a previous auction in 2018 but lost their licenses after failing to fulfill the base station installment requirement. For that reason, some insiders think a new business will not be able to immediately provide a groundbreaking network service from which customers will tangibly benefit.

BY KANG KWANG-WOO [kim.juyeon2@joongang.co.kr]