MTR may raise licence fees for 4G telecoms services

High-speed mobile service may be delayed if the railway firm imposes higher charges on mobile operators

PUBLISHED : Monday, 10 September, 2012, 12:00am
UPDATED : Monday, 10 September, 2012, 3:32am

The delivery of 4G mobile services on the MTR's railway system could be further delayed if the railway firm tries to raise the fees wireless network operators pay to offer their service in its trains and stations.

As negotiations continue between MTR and Hong Kong's five 4G service providers, a person close to the talks said: "Telecommunications network operators pay hundreds of millions of dollars worth of charges annually to the MTR for providing their services on its railway lines."

One 3G network operator is paying HK$25 million a year for using a handful of radio frequency bands, including 900 megahertz and 2100MHz, on which it delivers mobile services to subscribers travelling on the MTR.

Without elaborating, the person familiar with the talks said: "The MTR may charge even more for [firms to provide] 4G service."

For consumers, higher fees paid by telecommunications network operators to the MTR may have an impact on charges included in the mobile subscription contracts they sign up for.

Most of the network operators have tacked on HK$12 for MTR, tunnels, mobile service fee and administration charges to their users' monthly bills. But one operator said its monthly administration fee was not based on any MTR fee it paid.

"If we based that on the charges we pay, the administration fee will be a lot higher," said the operator, which declined to be identified.

Each mobile network operator also has to pay a fee before doing any construction in the MTR station area. A person familiar with the charge said it was a one-time payment of about HK$70,000 per station, based on a work proposal approved by an MTR-appointed consultant, whose fee is paid by the operator.

All telecommunications systems and network equipment within the MTR are installed and maintained by its authorised contractor. An installation fee is charged and shared by all participating telecommunications operators, and the equipment becomes MTR property.

Another person familiar with the talks said all the operators aimed to convince the MTR to keep new 4G-related fees low or lower than what they already paid to provide existing mobile services.

He said the talks with the MTR started "a few months ago".

CSL, Three Hong Kong, PCCW Mobile, SmarTone Telecommunications and China Mobile Hong Kong all provide 4G services based on long-term evolution (LTE) technology.

Each of their 4G LTE networks can provide theoretical online download speeds of up to 100 megabits per second.

Concerns about higher fees that the MTR could charge 4G network operators may have been fuelled by the MTR's first-half results. The firm's net profit fell for the first time in three years.

The MTR, however, reported last month that its first-half revenue related to telecommunications increased 2.5 per cent to HK$167 million.

MTR chief executive Jay Walder said: "In order to meet increasing mobile data demand, we facilitated telecoms operators to increase 3G data capacity and signal reception, as well as conducting a technical trial for 4G."