Hong Kong to make 3G spectrum licence decision in October

Government has three options which include seizing a third of operators' allotment to sell it

PUBLISHED : Thursday, 25 July, 2013, 12:00am
UPDATED : Thursday, 25 July, 2013, 4:27am

The Hong Kong government will make a decision in October regarding the reassignment of the 3G spectrum of four local operators, whose licences are due to expire in 2016, according to a top official.

The government has three options: it can renew the 3G spectrum licences on the 1.9-2.2 gigahertz band for all operators; auction all spectrum operated by the four; or take a hybrid approach under which it seizes a third of the 3G spectrum allotted to each of the current operators and then auctions it off.

The Secretary for Commerce and Economic Development, Gregory So Kam-leung, said yesterday the government had no preference between the three options at this stage.

"In deciding which option to take, we want to make sure of the continuity of communications services, we want better usage of the spectrum, which is a precious public asset, and we want fair competition," So said.

He said that while the first option might dent competition and the second option hamper services, the third one offered a mix of the benefits of the other two. "We hope more competition will lead to more investment in the industry and to more creative services for customers," So said.

If option three was adopted, he said, the government would like to carry out the spectrum auction in October 2014, so that operators had enough time to prepare for the change. The government had earlier said there would be an 18 per cent reduction in service quality if option three was adopted.

"Even if the operators had all their 3G spectrum renewed, there would still be a 9 per cent degradation in service quality due to rapid growth in demand," So said.

He added that the government had appointed an independent technical unit to research how serious the impact would be if option three was adopted.

The four operators whose 3G spectrum will be redistributed under the plan are SmarTone, HKT, CSL and Hutchison Telecommunications Hong Kong.

HKT said the negative impact would be far greater than the government's estimate and would "seriously affect the mobile network quality for all Hong Kong people".

It added the government had not allowed sufficient time for its consultant to carry out a proper study. "The scope of the study is not comprehensive and the whole process lacks transparency," the company said.