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3G operators may sue over free Wi-fi service

Three Hong Kong third-generation mobile operators may take legal action against the government over its policy to offer free wireless internet broadband service in its premises, a source said yesterday.

Offering the service, known as Wi-fi for wireless fidelity, for free violated fair competition in the telecommunications market in Hong Kong, the source said.

Hong Kong CSL, SmarTone-Vodafone and Hutchison Telecommunications International jointly wrote to Secretary for Commerce, Industry and Technology Joseph Wong Wing-ping earlier this week to voice their opposition.

PCCW, the only other 3G operator in the city and a Wi-fi service provider, did not sign the letter, as a company source said it believed the move could make it more convenient for residents to go online.

The joint letter said such a free internet service would create unfair competition because 3G operators had invested 'tens of billions of dollars' in network infrastructure and paid a spectrum utilisation fee of HK$1.3 billion for 15 years.

'The government should not intervene in the market,' an executive of a 3G mobile operator said yesterday, adding that such an arrangement would harm the reputation of the telecommunications market.

'The government requested us to have a better coverage in country parks, and we invested money to build a base station there,' another source said. 'There is no business case to build a base station in country parks, we did it at the government's request.'

A government spokesman yesterday said the free service would be limited to government premises and its opening hours would be restricted, so it would not compete directly with private providers.

The government would study the operators' opinion, he said.

Financial Secretary Henry Tang Ying-yen said in his budget last month that the government would spend HK$210 million to offer free Wi-fi service in government premises such as public libraries and district offices from early next year.

The average cost to provide the service would be about HK$20 million a year.

The Legislative Council's information technology and broadcasting panel will meet on Tuesday to discuss the issue.

The government will apply for funding from the council's finance committee later this month.

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