The 2,400 Billion Spectrum
The game of thrones was being played out on Teheran-ro in Gangnam-gu, Seoul. In Korea, the simplest way to prove success was to own a proper building on Teheran-ro in Gangnam. In that sense, TG had proven its success beyond doubt. They had not merely bought a building but purchased a twenty-five-story skyscraper outright with cash and designated it as their headquarters.
Lee Yong-kwon seemed immensely proud of this achievement and named the building TG Teheran Tower. Rather than simply calling it TG Tower, he deliberately included the road name. Among the available properties on Teheran-ro, they had selected the one with the shortest history, then completely redid the exterior with sky-blue glass curtain walls. In a district lined with 1980s-style buildings, the TG Teheran Tower stood out like a refined visitor from the twenty-first century.
“Wow! The headquarters is absolutely stunning. It really lives up to its reputation as design-driven TG!”
When Yoo Jae-won arrived at the TG Teheran Tower after taking a day off, his exclamation was no exaggeration. Lee Yong-kwon’s face glowed with satisfaction at the praise.
There had been considerable internal grumbling at TG when the tower was purchased and during the subsequent exterior and interior renovations. The most common criticism directed at Lee Yong-kwon for pushing the headquarters relocation and remodeling was that he was wasting money on unnecessary extravagance. In truth, maintaining the “design-driven TG” image had required stretching things a bit. The sky-blue glass curtain wall offered little beyond aesthetics.
Yet those criticisms had now vanished. Ever since the TG Teheran Tower rose, surrounding land and building prices had begun creeping upward. While rising real estate values and rents in Seoul were practically a law of nature, the appreciation around the tower had been far steeper than the usual rate. Naturally, the tower’s own appraised value had also climbed significantly since TG’s purchase, generating substantial capital gains.
Only then did TG’s founding members truly understand what Yoo Jae-won had meant long ago by “the tree that grows money.”
“Design? Please. We’re all eating thanks to the designs you drew.”
Despite his words, Lee Yong-kwon’s face was beaming. If asked to name the best decision of his life, he would choose without hesitation the moment he sponsored that computer competition and traveled all the way to Deokjin-ri to find Yoo Jae-won. Ever since partnering with Jae-won, TG’s stature had transformed completely.
“Let’s head up!”
The pair, who had paused briefly in the lobby, resumed walking. Their destination was Lee Yong-kwon’s presidential office, located on the highest floor of the TG Teheran Tower.
“One hundred sixty billion won?”
Yoo Jae-won barely managed to swallow the curse that nearly escaped and could only repeat the number. Once they reached the office and settled facing each other on the plush sofa, they drank Americano carefully brewed from the espresso machine and dove straight into the main topic.
TG had been engaged in secret negotiations with the Blue House over the second mobile telecommunications license, and a conclusion had finally emerged. To become the second mobile carrier, they would have to pay a “contribution” of 160 billion won.
Of course, they were not being asked to deliver cash in apple boxes. Mobile service required radio frequencies, and the rights to those frequencies were purchased from the government. The Blue House was essentially saying that if TG paid the standard frequency usage fee plus an additional 160 billion won, they would take care of the rest.
“What was the original frequency usage fee?”
“It varies slightly depending on subscriber numbers, but based on the business plan we submitted, it should come to around 8 billion won per year.”
Frequency contracts typically ran for ten years, so the base fee would total 80 billion won. Adding the extra 160 billion brought the total to 240 billion won that needed to be prepared. This was outright banditry.
Radio frequencies were public assets. The state was supposed to distribute them fairly under authority delegated by the citizens. Any money collected as usage fees should be used for the public good. Yet the people in the Blue House were openly demanding twice the normal fee to line their own pockets.
“Have you made a decision?”
Yoo Jae-won asked Lee Yong-kwon first. It was a courtesy. From the man’s expression, the decision had clearly already been made.
“We have to. You don’t skip making kimchi just because you’re afraid of maggots.”
As expected, Lee Yong-kwon showed no hesitation. Even though an extra 160 billion won—far above the standard frequency fee—was attached, he intended to push through. A few years ago such a sum would have left him speechless, but TG’s scale had grown enough that they could prepare that amount in cash immediately.
“Yes, that’s the right answer.”
Yoo Jae-won fully agreed. Securing the golden 800 MHz band for 240 billion won offered far greater advantages than it appeared. The 800 MHz band’s excellent diffraction characteristics were a powerful asset in mountainous Korea. For mobile phones, the top priority was reliable service no matter where the user was. If competitors suffered dropped calls while TG’s network worked perfectly, there could be no better marketing advantage.
“Right. Now let’s talk about our story. Specifically, TG Mobile.”
TG Mobile was, as the name suggested, a subsidiary established to handle TG’s mobile telecommunications business. The 240 billion won frequency fee represented only a portion of the overall investment when considering base station construction, device procurement, nationwide dealer recruitment, and AS center operations. Mobile telecommunications was a business that demanded massive initial capital. Building a network that provided clear calls everywhere in Korea required funds well into the trillions of won.
Of course, they could reduce the burden by first commercializing service in major urban areas, accumulating profits, and gradually expanding base stations. Still, the initial capital outlay would be quite burdensome even for TG.
“What investment ratio should we use?”
This was why Lee Yong-kwon had considered a partnership—specifically with Yoo Jae-won. Mobile telecommunications was a goose that laid golden eggs, and Lee Yong-kwon knew better than to share its equity with just anyone. But with Yoo Jae-won, the story changed. TG owed its position as the world’s largest PC maker entirely to Jae-won’s designs. Talking about his contributions in other fields would take all day.
That was why Lee Yong-kwon wanted to move beyond a simple friendship. Their current relationship could sour at any time, and if it did, TG’s status would plummet. After much deliberation, he had concluded that giving Yoo Jae-won equity in TG Mobile was the best option. It would secure capital while binding ID Group even more closely to them.
There was no downside for Yoo Jae-won either.
“Well, I’ll take whatever share you give me.”
Despite his words, a hint of anticipation showed on Yoo Jae-won’s face. The equity was not free, but the value of shares in TG Mobile—which would soon become Korea’s largest mobile carrier—would skyrocket within a few years.
Moreover, mobile communications occupied an important place in Yoo Jae-won’s master plan. The true core lay in mobile devices and the various apps that ran on them, with the communications service itself slightly secondary. Even so, he had no intention of ignoring it completely.
The mobile ecosystem in early 2000s Korea had been truly abysmal. The memory of data charges reaching tens of thousands of won from a single mistaken click still made his teeth clench. The carriers had completely failed to understand the core principle of mobility—that users should be free. They operated like fish farms, confining everything within their own service boundaries and focusing solely on extracting money.
To prevent that situation from repeating, it was better to hold some equity in TG Mobile.
“Obviously it’ll be 51:49. I’d agree even if you took 51 percent!”
Lee Yong-kwon spoke without restraint.
“No, I’m perfectly satisfied with 49 percent.”
If Yoo Jae-won took 51 percent of TG Mobile, people would inevitably claim ID Group was devouring everything. He could endure the finger-pointing, but spreading his attention too thin across too many projects and failing to execute the master plan properly was something he had to avoid.
“The issue is the capital amount.”
Money was generally better in larger quantities, but the story differed when it came to registered capital. A company with one million won in capital could conduct hundreds of billions in business, and even a ghost company with one won in capital could own firms handling trillions. Naturally, both men had a firm vision of growing TG Mobile into Korea’s top mobile carrier, so they had no intention of setting an abnormal capital amount.
Therefore, the correct approach was to set capital sufficient to build the infrastructure for launching service in major metropolitan areas.
“Since the frequency fee has increased significantly, shall we set it at around 600 billion won?”
Yoo Jae-won, who had calculated it mentally, spoke one step ahead of Lee Yong-kwon, who was still tapping away on his calculator. Paying 240 billion for the frequency rights and using the remaining 360 billion for base stations and other mobile service infrastructure seemed appropriate. TG would contribute 310 billion, while Yoo Jae-won would provide 290 billion.
“By the way, what mobile standard will we use?”
Mobile standards were divided between European and American systems. Korea, which naturally turned toward America, was heavily inclined toward the U.S. standard. However, even within the American system, technology was split between TDMA and CDMA, and no decision had been made yet.
“Can we decide that ourselves? We’ll have to use whatever the Ministry of Communications tells us to.”
Ah, he had forgotten. In Korea, the government still came first. Once the government decided, companies had no choice but to follow, even if it meant swallowing bitter medicine. Setting the mobile standard was not determined by operators but by the government.
“Then please strongly advocate for CDMA whenever you have the chance.”
“Understood. I’ll definitely do that.”
Lee Yong-kwon did not ask why. He trusted Yoo Jae-won so completely that he would believe him even if Jae-won claimed to make soybean paste in a field.
“CDMA is the most advanced wireless communication technology currently available. It offers excellent security and can flexibly accommodate massive increases in users.”
Yoo Jae-won kindly added a technical explanation. He did not, however, reveal every reason. He recommended CDMA because he was familiar with it. Although he disliked it due to past experiences with Qualcomm’s bullying, no technology was more familiar to him than CDMA, which he had used while employing various mobile devices. Besides, Qualcomm was already an invested company, so the previous high-handed behavior would not recur. Once Future Electronics accumulated semiconductor expertise and began foundry operations, they would produce their own APs, further narrowing Qualcomm’s position.
Afterward, Yoo Jae-won discussed various matters concerning TG Mobile. They also roughly set the most important element—the launch timing.
“We need to start within a month at the latest.”
“Isn’t that too fast?”
“Not at all. That moment is optimal.”
The time Yoo Jae-won referred to would coincide with the height of the presidential campaign. TG Mobile’s launch might not receive proper spotlight and could even become entangled in unnecessary political disputes. However, the second mobile carrier project had been President Roh’s long-cherished goal. Completing it while he still held power would minimize future complications.
The current presidential race had formed a triangular balance among Kim Young-sam, Kim Dae-jung, and Jeon Myeong-heon. The gap between Kim Young-sam, who currently led in approval ratings, and Jeon Myeong-heon, who trailed, was less than ten percent. The difference between Kim Dae-jung and Jeon Myeong-heon was a mere 4.4 percent. With more than a month remaining until the election, a major incident could swing the numbers unpredictably. Since no one knew who would take the next administration, finalizing the second mobile carrier project while President Roh remained in the Blue House was the best approach.
A few days later.
The second mobile carrier project, which had been drifting aimlessly after Sunkyung returned its license, suddenly gained momentum. As expected, once money moved, everything flowed smoothly. The Ministry of Communications announced it would select the second carrier not through re-evaluation but from among the second-place candidates who had lost to Sunkyung. News that TG was the strong favorite spread rapidly.
Pohang Iron and Steel and Kolon, which had expressed strong interest in the mobile business, protested fiercely. They argued that a new competition should be held excluding Sunkyung, and that reusing the previous evaluation was unacceptable.
The loudly protesting Pohang Iron and Steel and Kolon fell silent at the news that TG would pay 240 billion won. Although they were fairly large companies in Korea, they lacked the capacity to produce 240 billion won solely for frequency fees.
Follow-up reports continued. As soon as government approval was granted, TG Mobile—a colossal telecommunications company with 800 billion won in capital—would launch. The company announced it would aim for 2G mobile commercialization in the first half of 1994.
A storm bearing the name TG swept through the stock market. TG’s stock price had already been rising before the articles appeared. The moment the news broke, it hit the daily upper limit and refused to come down. Buy orders at the upper limit piled up, reaching dozens of times the usual trading volume.
Share prices of companies involved in mobile devices or related businesses rose in tandem. Eventually, a bizarre phenomenon emerged where any stock containing the word “telecommunications” rose for no reason. It was the classic pattern of blind investment.
As expected, the political sphere did not let the matter pass quietly. The opposition party, particularly the Democratic Party, raised its voice, claiming TG’s selection constituted preferential treatment and demanding verification of the entire decision-making process. They also pressured the government to propose a method for returning the 240 billion won in frequency fees to the citizens, since the money belonged to the people.
President Roh, of course, ignored them cleanly. The ruling party remained silent for the president’s sake. The Tongil National Party initially tried to coordinate with the Democrats but quickly retreated upon learning that ID Group would invest in TG Mobile. There was even a farce in which a spokesman’s statement harshly criticizing TG was withdrawn within minutes.
Given the enormous stakes involved, the issue would normally have caused days of uproar. In dynamic Korea, however, it lasted barely a day’s worth of news.
The nation was now in full presidential campaign mode. All eyes were focused not on TG Mobile’s launch but on who would seize the next presidency. The three leading candidates met jointly and agreed to conduct a clean and fair election. Surprisingly, it was Assemblyman Jeon Myeong-heon who had led the agreement. The two Kims had shown little enthusiasm, but Jeon Myeong-heon had pushed aggressively, declaring that refusal would be regarded as intent to commit electoral fraud.
In the past, Jeon Myeong-heon’s words would have been lightly ignored. Now that his approval rating had reached the upper 20 percent range, it was difficult to dismiss him. In the end, the three produced a joint agreement. The published text was admirable, promising strict adherence to election laws and neutrality from public authorities including the Agency for National Security Planning.
“What do you think? Don’t I look like a real politician now?”
Jeon Myeong-heon squared his shoulders, clearly proud of his achievement.
“Yes, it’s impressive!”
The one answering was naturally Yoo Jae-won. The two men were currently sitting side by side in the back seat of a car heading to Busan. Jeon Myeong-heon’s trusted lifelong secretary, who also served as his driver, was at the wheel. Thanks to that, they could speak freely.
“You don’t actually believe that promise will be kept, do you?”
Yoo Jae-won asked, half in disbelief. He was not relieved simply because they had agreed to a clean election. He knew that collecting dozens of such agreements would still be useless.
“Of course not! I’ve been dealing with politicians for decades. I’ve seen them reverse yesterday’s statements 180 degrees countless times. Both of them will probably ignore the agreement. Even I don’t know how things will turn out. But after years in politics, I’ve seen how thoughtless past statements often come back to bite people. If something happens in this election, today’s agreement will grab them firmly by the ankle.”
Experience truly could not be ignored. Yoo Jae-won found himself wondering whether Jeon Myeong-heon had always possessed such political skill. It also made him curious why the man had stumbled so badly in the past.
“By the way, why Busan at this particular moment? Explain in detail.”
Yoo Jae-won’s idle thoughts faded at Jeon Myeong-heon’s question. Today’s trip to Busan had been arranged at Yoo Jae-won’s suggestion. No major formal event had been prepared. It was a modest schedule in which Assemblyman Jeon Myeong-heon would personally visit the Tongil National Party’s Busan regional organization to inspect election preparations and hold a meeting with local party officials.
Had anyone but Yoo Jae-won suggested it, Jeon Myeong-heon would not have considered moving for such a minor matter.
“The region where the biggest variable will appear in this election is Busan. The reason? Call it intuition!”
Calling it intuition made further questions awkward. Before long the car entered Busan and reached Nam-gu, where the Tongil National Party’s Busan district office was located.
“By the way, aren’t you hungry?”
“Ah, I was starting to feel a bit peckish. How about that place over there for something light?”
It was an awkward time for dinner. The meeting with the Busan district party officials had been scheduled for late afternoon and included dinner together, so they had left Seoul relatively late in the morning. They had eaten a simple lunch at a rest area. Yoo Jae-won, whose appetite was already poor, had not eaten much.
The interesting part was the restaurant Jeon Myeong-heon pointed to: Yukyung Chicken. The chicken franchise that had begun in Deokjin-ri and Yeoju had spread rapidly and now reached all the way to Busan. The harmonious trio of fried, seasoned, and soy sauce flavors captivated palates from children to adults. When paired with fresh draft beer from a Busan brewery, the synergy was maximized. Thanks to this, it had grown into a nationwide franchise in just a few years.
“Chicken sounds good! But it might feel a bit heavy right now. How about that place instead?”
Jeon Myeong-heon chuckled and turned his gaze toward the new restaurant Yoo Jae-won indicated. The sign for Chowon Bokguk was clearly visible.