Government's 3G spectrum plan will add up to HK$30 to bills says operator

The government's plan to seize and auction off chunks of 3G mobile spectrum will act as a new tax on the sector and significantly raise the cost of mobile telecommunications services, according to HKT, the largest telecommunications network operator in Hong Kong.

Alex Arena, the group managing director of HKT, which is owned by PCCW, said: "They [the government] said the prime objective [for the plan] was to get maximum value for the spectrum. But you will have to pay for the consequences, since it effectively imposes a tax on all consumers."

The city's four leading mobile network operators, HKT, SmarTone Telecommunications, CSL and Hutchison Telecommunications Hong Kong, have called on the government to follow international practice by renewing their 3G spectrum allocations in the 1.9 gigahertz to 2.2GHz band, which are due to expire in October 2016.

Arena said the government's plan would increase spectrum prices "up by 500 per cent from what we currently pay", which HKT estimated could add HK$20 to HK$30 to a mobile subscriber's monthly bill.

"We can't cook noodles without water and we can't provide telecoms services without spectrum," Arena said. He said the government should not pretend that what it is doing is for the consumers' benefit.

HKT calculated that each subscriber's monthly bill currently included a HK$19.50 total charge on various fees that the operator pays to the government, the MTR and the tunnel operators. This cost will increase as the government raises spectrum charges and the MTR and tunnel operators increase their fees.

In the initial industry consultation held by the Communications Authority last year, the government presented three options on what it might do with the expiring 3G spectrum licences: renew them at a reasonable fee; put the 3G spectrum up for public auction; or take a third of each of the operators' 3G spectrum allocation and auction these off.