Public urged to think beyond licence profit

PUBLISHED : Saturday, 06 May, 2000, 12:00am
UPDATED : Saturday, 06 May, 2000, 12:00am

People should look beyond the possible windfall - estimated at nearly $70 billion - in considering whether the Government should issue third-generation mobile-phone licences by auction, a senior telecommunications official has urged.

The Director-General of the Office of the Telecommunications Authority (Ofta), Anthony Wong Sik-kei, said Hong Kong could benefit even more if the issuing of third-generation licences helped turn it into the region's information hub in the long-run.

'I agree auctioning [the] radio spectrum is the simplest, more transparent and fairest way. We have not ruled it out. Our only concern is that it will drive up costs. It did happen in the United Kingdom.' There have been calls for the Government to consider auctioning the licences following the huge GBP22.5 billion (HK$272.7 billion) windfall for the British Government from its auction, the first in the world.

Mr Wong said: 'There will be a short-term windfall of several tens of billions of dollars. But in the longer term, we will have to face a more expensive service. We have to strike a balance. Companies will definitely pass the cost to consumers. They won't run their business at a loss . . . Of course, we will also study whether it will mean licensees being able to make huge profits if licences are granted free.

'If we believe the e-commerce age is bound to happen and everyone will be using it, we have to take a wider look at the issue before it is too late. What happens in a few years' time is so difficult now to foresee.' Third-generation services will revolutionise mobile telecommunications, allowing access to the Internet and other applications. Ofta's first industry consultation period will end on May 22. It expects to introduce a formal proposal in July for a second round of consultation and plans to issue four to six licences by the end of the year.

Mr Wong said different bureaus were involved in the issue and the overall interest of Hong Kong would be taken into account in the final decision.

'It's not and has never been a beauty contest. There are objective criteria. ICAC officials will be involved in the award process. There won't be the so-called 'collaboration between government and tycoons',' Mr Wong said.