Ofta cuts licence fees for telecoms operators

PUBLISHED : Saturday, 10 January, 2004, 12:00am
UPDATED : Saturday, 10 January, 2004, 12:00am

But the savings will be too little to pass on to consumers

The Office of the Telecommunications Authority (Ofta) has proposed lower licence fees for telecoms operators, but the savings will be too small to pass along to consumers.

The authority said it would reduce annual mobile-phone licences by 16 per cent because of falling administration costs as subscriber numbers rise.

For external telecoms licences for businesses such as undersea cable operations, the reduction is 60 per cent. Ofta said its administration costs for external telecoms had been substantially simplified after market liberalisation in April 2001.

More than 20 cable and satellite operators are paying $500,000 annually in licence fees. Their bills could drop to just $200,000 per year after May.

The six mobile operators pay licence fees based on their number of contract and active pre-paid subscribers. They would pay $20 per subscriber each year, compared with $24 at present.

Hutchison Telecom, which has 1.8 million subscribers, paid about $43.2 million in licence fees last year. It would save about $7.2 million after the reduction.

The reduction would mark the third time in the past four years that Ofta has lowered licence fees.

In May 2002, it cut mobile licence fees to $24 from $30 per subscriber. Two years before that, the fees were cut from $55 to $30.

The reductions come amid strong subscriber growth in Hong Kong. Since December 2000, Hong Kong has added 1.27 million subscribers, reaching 6.21 million as of October last year.

Ofta began including active pre-paid users as part of its calculations for mobile licence fees in May 2002.