• Sun
  • Aug 31, 2014
  • Updated: 4:14pm
Lai See
PUBLISHED : Wednesday, 03 April, 2013, 12:00am
UPDATED : Wednesday, 03 April, 2013, 3:28am

Government hangs up on Hong Kong's mobile phone users

BIO

Howard Winn has been with the South China Morning Post for two and half years after previous stints as business editor and deputy editor of The Standard, and business editor of Asia Times. His writing has also been published in the Far Eastern Economic Review, the Wall Street Journal, and the International Herald Tribune. He writes the Lai See column which focuses on the lighter side of business.
 

The consultation period for government proposals to reallocate mobile frequency spectrum ends next week. For reasons best known to itself, the government wants to reassign the spectrum when the present arrangements expire in 2016. Lai See has yet to meet anyone who thinks this is a good idea.

Clearly, China Mobile - the one company that doesn't directly have access to 3G spectrum, though is able to lease it - disagrees, as indicated in its comments in the government's consultation document.

Why is Hong Kong doing this when its mobile operators are providing one of the most competitive services in the world? They compete and the government benefits from the lump sum they originally paid and from annual licence fees. In most other countries around the world, when the contract period expires, there is some discussion with the regulator and the system is rolled over, so long as operators are providing a good service and the spectrum is efficiently used.

My colleague Jake Van der Kamp has commented at length as to why the government is taking this route. He along with many others see the exercise as a device to enable state-owned China Mobile to get more of a foothold in the market.

As he noted, after an earlier government "study", a number of petrol station operators were turfed out and replaced by mainland state-owned firms PetroChina and Sinopec.

It is also worth recalling that CLP Holdings was shoehorned into a deal whereby its sole supplier of gas is to be PetroChina. One wonders where this will lead next. Will the power companies have to bid for the right to supply electricity when the next scheme of control expires, in a ruse to let in a mainland supplier?

If the government proceeds with one of its favoured proposals, taking a third of the spectrum from existing players and letting China Mobile buy it, the state firm will have the biggest slug of spectrum among all five operators.

One aspect of these proposals in particular that has exercised people is the government's claim that it is doing this in the interests of improving competition, which it believes is necessarily a good thing for consumers. However, in another section of its consultation document it cheerfully admits that this exercise will lead to an 18 per cent degradation of services during a transition period that could last two to three years. If that is the outcome, how can it be good for consumers? And why should a perfectly good system be changed simply to allow access to a big mainland company with political clout?

In its submission, China Mobile cites article 118 of the Basic Law, which states: "The Government of the Hong Kong Special Administrative Region shall provide an economic and legal environment for encouraging investments, technological progress and the development of new industries." It claims that depriving an "interested party" of the chance to bid for spectrum is a clear violation of the Basic Law in that the environment so created does not encourage investment or technological progress. It argues that "the major mission and task of the Communications Authority is to create a level playing field" so that all interested parties can compete for the spectrum concerned.

It would be hard to imagine a US or any other foreign company seeking to enter this market being taken seriously by the government with this line of argument. One country, two systems is still supposed to be operating here.

 

Ranting, not reporting

It's good to see that Apple has seen the error of its ways and heeded the concern of the People's Daily, which has denounced it as "dishonest, greedy and arrogant". How many on the mainland has Apple killed with its products? How many babies have died after swallowing toxins produced by Apple? How many villages have been desecrated by the pollutants it spews out? The hypocrisy of the People's Daily is clear for all to see.

It's so easy for the People's Daily to take a swipe at foreign firms rather than taking on more unscrupulous but politically connected domestic interests. As many mainland microbloggers have asked, where was the People's Daily during all the ghastly food and pollution scandals? All we heard from it was a big, brave silence. Maybe we are witnessing a turning point. We await with interest.

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This article is now closed to comments

chaz_hen
Just think, next time there's to be a mass protest in HK like the one over Article 23, phone service providers can cut off all communications and power companies will cut all power. These, I believe are some of the more insidious reasons Hong Kong and its consumers must bend over and take it where the sun doesn't shine for the mainland (read: GOVERNMENT/CCP) firms to have access to a "fair playing field".
Good luck, HK people...
 
 
 
 
 

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