Hong Kong mobile operators gird for fight against 3G cuts
Government's plan to slice off a third of each network providers' 3G spectrum and auction these off may benefit China Mobile
Hong Kong's four major mobile network operators may mount a legal challenge against a government plan to take away and auction off chunks of 3G spectrum that they currently use, sources said.
The government, represented by the Communications Authority, is expected to decide on that plan in October, which would be exactly three years before the 3G spectrum licences of CSL, SmarTone Telecommunications, Hutchison Telecommunications Hong Kong and PCCW's HKT are due to expire.
In the initial industry consultation held by the Communications Authority last year, the government presented three options on what it may do with the expiring 3G spectrum licences: renew them at a reasonable fee; put up all of the existing 3G spectrum for public auction; or take one-third of each of the four mobile network operators' 3G spectrum allocations and auction them off.
Sources said the government might already have made up its mind about choosing the third, so-called hybrid option even before the four mobile network operators could file their submissions to the Communications Authority's current public consultation, which closes on April 11.
The four operators, in a letter sent last month to the members of the Legislative Council's panel on information technology and broadcasting, said the government's plan was "at odds with international practices", such as those in Britain, Australia and New Zealand, "where licences of the incumbent operators are renewed upon their expiry".
Embarking on the third option "will have a serious adverse impact on Hong Kong consumers", according to the letter, a copy of which was obtained by the South China Morning Post. The unwanted effects included the inability to make or receive mobile calls; dropped calls; slower data speeds for uploading, downloading, and searching for information on the internet; and increased service degradation inside the city's shopping centres and on the MTR.
In addition, the uncertainty would force the four mobile network operators to step back from heavy investment in their 3G networks, they said.
While the four operators already run higher-speed 4G mobile networks over different spectrums, their 3G infrastructure provides vital support for existing traffic. The 3G spectrum could also be reused for future 4G services, accommodating the growth of subscribers.
Legislator Charles Peter Mok described the 3G spectrum issue as "complex", with the government wanting to avoid being seen as in collusion with the big conglomerates that are behind the incumbent mobile network operators.
The government has said that competition might increase if another operator were to enter the market. China Mobile, the world's largest wireless network operator, has expressed interest in bidding for the 3G spectrum.