Hutchison Whampoa

Watchdog tests telecoms waters for the all-in-one phone licence

PUBLISHED : Thursday, 22 September, 2005, 12:00am
UPDATED : Thursday, 22 September, 2005, 12:00am

Operators accuse Ofta's unification proposals of dodging the tough issues

The telecommunications regulator hopes to begin issuing a single licence to mobile and fixed-line operators as early as the first quarter of next year, as technological advances blur the distinction between traditional and mobile telephones.

Hong Kong is one of the few markets moving towards a unified licensing regime. The regulator is preparing for the day when voice and data services will be offered on a single device over a single, converged network, both inside and outside the home.

But operators say the Office of the Telecommunications Authority (Ofta) is taking a piecemeal approach to the regulatory change, dithering over tough issues such as how mobile and fixed operators will charge each other for interconnecting calls under the new regime.

Ofta yesterday launched a two-month consultation on its proposal, seeking industry views on a new unified licence that will exist alongside the present separate fixed and mobile licences.

Rapid changes in network and device technology are introducing new applications in the sector.

Operators such as BT are offering converged voice services, such as a portable handheld that wirelessly connects to a home network and roams on to a mobile network when it is outside the home.

This fixed and mobile convergence also applies to data. Wireless broadband technologies such as WiMax will give consumers high-speed internet access both inside and outside the home.

But the trend towards convergence has left the existing regulatory framework, separating mobile and fixed licences, looking dated. Other countries in which unified licensing is to be introduced include Singapore and India.

The first recipients of the unified licences are likely to be firms that apply for broadband wireless spectrum, to be issued early next year.

Under Ofta's proposal, each unified carrier licence will be valid for 15 years at a cost of $1 million per year. Carriers will also have to pay $8 per customer and $3 per telephone number - regardless of whether the number is assigned to a user or not.

At present, fixed-line operators pay $7 per customer on top of a $1 million annual fee. Mobile operators do not pay an annual fee but instead pay a higher charge of $18 per customer. Neither fixed-line nor mobile operators pay a fee per telephone number as this is included in the subscriber fees.

Ofta director-general Au Man-ho said the unified licences would not give operators carte blanche to begin building new networks.

'A unified carrier licence would state clearly what kind of services the licensee is allowed to provide,' Mr Au said.

'It does not mean that with the new licence a mobile operator, for example, would be immediately allowed to expand to fixed services as they must first make a proposal to us [and gain our approval].'

But an issue left unresolved is how mobile and fixed-line operators can charge each other for call interconnection and Ofta has not yet said when it will tackle the question. It plans to appoint a consultant to study this and other issues such as number portability.

The mobile operators are clamouring for change because they pay an aggregate $600 million a year for the right to connect to their fixed-line counterparts.

Fixed-line operator Hong Kong Broadband Network said in a statement: 'HKBN thinks it is more appropriate for Ofta to first deal with details such as mobile-to-fixed interconnection and number portability issues before [unified] licensing.'

None of the operators that are capable of offering converged services - PCCW, Hutchison Telecommunications and New World Telecom - was available for comment.


Number of fixed-line operators: 5

Number of mobile operators: 6

Fixed-line and mobile operators

Hutchison Whampoa:

H utchison Global Communications and Hutchison ?3?


PCCW and Sunday Communications

New World Group:

New World Telecom and New World Mobile

Fixed-line only operators

Wharf T&T

Hong Kong Broadband Network

Mobile only operators


China Resources Peoples Telephone


Ofta proposals

Unified carrier licences to cost $1 million a year

Licences to run for 15 years

Operators to pay $8 fee per customer per year (At present fixed-line operators pay $7 per connection

and mobile operators pay $18 per mobile subscriber)

Operators to pay $3 fee per subscriber telephone number per year (At present not separately charged)

Operators can continue under their existing fixed or mobile licences until they expire