SK Telecom Wins 1.8-Gigahertz Spectrum Auction in South Korea; Shares Rise

SK Telecom Co., the largest mobile- phone carrier in South Korea, won the rights to use a key frequency for fourth-generation phone service for 995 billion won ($924 million) in the country’s first auction of spectrum.

The carrier won 20 megahertz of airwaves in the 1.8- gigahertz frequency band, the Korea Communications Commission said in a statement today. KT Corp. (030200) dropped out of the race because the bidding was too competitive, the Seongnam, South Korea-based carrier said in a statement. KT was awarded 10 megahertz in the 800 megahertz range for 261 billion won, according to the statement by the company.

Bids for the 1.8-gigahertz band had almost doubled since the auction began on Aug. 17, as South Korea’s two largest mobile-phone carriers sought to secure more spectrum amid surging data use before they begin 4G wireless services. SK will use the frequency based on the long-term evolution, or LTE, technology, the carrier said in a statement.

“The band is globally preferred,” Park Jong Soo, a Seoul- based analyst for Hanwha Securities Co., said. “SK didn’t have a proper LTE-related frequency. It’s better for them in the mid- to-long term to get this frequency at a high cost than to lose it.”

Shares in SK rose 2.1 percent to 147,500 won as of 11:38 a.m., while the benchmark Kospi index gained 2.7 percent. SK Telecom began LTE service in Seoul in July and plans to expand coverage nationwide by 2013.

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.