A South Korean-based consortium led by messaging giant Kakao emerged as the fourth mobile player in the country after winning a bid for 5G spectrum in the 28GHz band, paying more than twice as much as each incumbent spent in 2018.

The Ministry of Science and ICT (MIST) stated the Stage X consortium paid KRW430.1 billion ($325.1 million), outbidding Sejong Telecom. The group is made up of Kakao unit Stage Five and other local companies.

An auction was conducted after MIST cancelled five-year spectrum licences of SK Telecom, KT and LG Uplus for failing to reach a mandated base station deployment target in the 28GHz band. The operators met targets in the 3.5GHz band, which carries ten-year licences.

South Korea generated KRW622.3 billion from spectrum in the 28GHz band in 2018 in one of the world’s first 5G auctions.

Stage X enters one of the most congested mobile markets in the world, with GSMA Intelligence data showing 98 per cent of subscribers on mobile internet plans and 83 per cent using smartphones.

More than half of subscribers, some 32 million, migrated to 5G plans,

The current trio of operators have struggled to grow mobile service revenue and booked marginal ARPU gains since launching 5G services in 2019.

Marc Einstein, chief analyst at research company ITR, told Mobile World Live fourth entrants have struggled in Japan, China and Singapore: “Kakao will likely have similar struggles unless regulations such as infrastructure sharing are in place to facilitate its entry into the market. It’s not going to be easy.”

The government has been pushing for more competition and lower prices over the past few years, and the new player supports its policy, he added.