The South Korean government expected Stage X to become the country’s fourth mobile operator
South Korea’s Science Ministry said it will revoke the license of newcomer operator Stage X for failing to meet legal requirements to run the business, including paid-in capital of KRW 205 billion ($149 million) that was due last month, Korean newspaper The Korea Herald reported.
According to the report, the Ministry of Science and ICT will carry out a hearing on Stage X’s case to finalize its decision on canceling the company’s license to operate as a mobile operator.
The government had expected Stage X to become the country’s fourth mobile carrier, joining SK Telecom, KT and LG Uplus.
Stage X is a consortium that is integrated by Stage Five, a communications affiliate of tech giant Kakao Corp. and other unidentified companies. Stage X planned to launch nationwide mobile network services in the first half of 2025 via spectrum in the 28 GHz band. The company was planning to invest KRW 612.8 billion to deploy its 28 GHz 5G network across South Korea. The telco had said it would build 6,000 base stations, which is the mandated installation standard for the 28 GHz frequency network.
However, issues arose from Stage X’s inability to pay the full capital, and discrepancies in the ownership ratios of major shareholders compared to what was stated in the frequency allocation application, according to the Korean government.
Despite the ministry’s requests for additional explanations and compliance from the company, the problems remain unresolved, according to the report.
“We concluded the capital raising claimed by Stage X could not be trusted and that it would be difficult to properly carry out the business if the capital specified in the allocation application was not properly secured,” said Second Vice Science minister Kang Do-hyun.
“Considering expected future concerns of partners such as equipment manufacturers, investors and users, we concluded that cancellation of the selection of companies subject to allocation was inevitable,” he added.
Kang also said that the government may consider another auction for the 28 GHz spectrum band for the 5G network, if necessary.
Meanwhile, Seo Sang-won, a representative of Stage X, said that he believes the ministry’s plans to cancel the carrier’s license are unreasonable.
“We submitted a plan to the government and are proceeding accordingly, but they suddenly ignore it and say it is wrong. If I understand the government’s argument, I will accept it, but I think it is unreasonable,” he said.
Last month, Japanese companies Rakuten Mobile, Rakuten Symphony and Stage X announced an agreement with the aim of establishing a comprehensive framework for strategic collaboration between the companies.
