SK Telecom (Seoul, South Korea), the top mobile carrier in South Korea, said on Monday it beat rival KT Corp in an auction for the license for the 1.8 GHz spectrum band for $920 million, more than double the initial bid price.
The auction for the so-called "golden spectrum" for next generation Long Term Evolution (LTE) services was hotly contested by the two mobile operators struggling to grab a bigger share of the growing smartphone market.
KT said in a statement on Monday that it decided to give up the auction due to bid costs soaring from the initial auction price of $415 million.
Instead, the firm has secured the remaining 800 MHz spectrum band, KT said in a separate statement. A company official said KT paid $243 million for the spectrum.
Shares in SK Telecom and KT rebounded from losses in the previous session, when the intensifying auction sparked cost concerns, advancing 4.2% and 3.7% respectively as of 0134 GMT.
"Of course there are concerns about the winner's curse after this race, but the fact of the matter is they had to win (this spectrum) desperately for better next-generation services," said Yang Jong-in, an analyst at Korea Investment & Securities.
Smaller rival LG Uplus won the license for another spectrum for only $415 billion, the lowest bidding price.
(Reporting by Hyunjoo Jin and Ju-min Park; Editing by Jonathan Hopfner)