Hutchison Whampoa

Ofta farms out 3G licence pricing

PUBLISHED : Tuesday, 12 December, 2006, 12:00am
UPDATED : Tuesday, 12 December, 2006, 12:00am

The Office of Telecommunications Authority, the telecoms regulator in Hong Kong, will appoint an independent consultant to determine the reserve price for a new CDMA 3G licence to be issued next year, a Legislative Council panel was told yesterday.

According to the document filed by Ofta to Legco yesterday, the government plans to auction one licence for US-based CDMA 2000 3G technology next October.

The winning bidder should provide the service in Hong Kong no later than November 20, 2008, when the existing CDMA 2G licence held by Hutchison Telecom International will expire.

China Unicom, the mainland's second-biggest mobile operator, will bid for the licence, the company's Macau business deputy manager, Chen Wu, said last week.

'We need to issue the licence no later than October 2007 and giving sufficient time for the new licensee to build the network,' Ofta assistant director T.Y. Chan said yesterday. 'We should make sure that tourists using CDMA service could enjoy CDMA roaming service on November 2008.'

Mr Chan said the government will appoint an independent consultant to set the reserve price for the new licence which will be paid for in a one-off lump-sum payment.

Holders of the four existing 3G licences awarded in 2001 pay for them based on a percentage of turnover each year. The licences are worth HK$1.3 billion over 15 years.

'The reserve price should be made in reference to the level set in the last 3G auction in 2001 but adjustments are to be made to take into account the change in the market and the perceived change in 3G spectrum value after the burst of the IT bubble in 2001,' Ofta said.

Industry watchers believed that the government should set the price below the 2001 auction level, as the 3G market is already experiencing fierce competition.

The licence is paving the way for China Unicom, the mainland's CDMA operator with over 35 million users, to provide a roaming service in Hong Kong.