3G spectrum battle set to start for network operators

Network operator is open to all options in its bid to renew licences after profit grows 2 per cent

PUBLISHED : Thursday, 01 August, 2013, 12:00am
UPDATED : Thursday, 01 August, 2013, 5:07am

Hutchison Telecommunications Hong Kong, which posted a modest net profit in the first half of this year, expects the city's leading network operators to block a government plan to seize and reassign chunks of 3G spectrum, which it says is against consumers' interest.

Chief executive Peter Wong King-fai said yesterday: "If the government disregards that plan's impact on consumers, we will consider every feasible option, including taking joint legal action, to renew our 3G spectrum licences."

Hutchison Telecom, CSL, SmarTone Telecommunications and PCCW's HKT have urged the government to follow international practice by renewing their 3G spectrum allocations in the 1.9-gigahertz to 2.2-gigahertz band, which are due to expire in October 2016. They also warned of serious disruption and higher costs of mobile telecommunications services under the government's plan.

Wong criticised the plan's hastily arranged technical feasibility study, which the government intends to release in October at the same time that its 3G spectrum decision will be formally announced.

"We urge the government to announce the findings of their technical feasibility study as soon as possible," he said.

Asked whether the government was paving the way for a mainland company to enter the market, Wong said: "I don't want to speculate, but that is the usual case." He did not elaborate.

China Mobile, the world's biggest wireless network operator, had earlier indicated its intention to bid for any reassigned 3G spectrum.

Hutchison Telecom, which operates wireless and fixed-line networks, yesterday reported a 2 per cent rise in net profit to HK$572 million in the six months to June from HK$562 million a year earlier as turnover from the mobile operation declined owing largely to lower mobile-phone sales.

That profit was below the 14.8 per cent year-on-year increase to HK$652 million forecast by Barclays analysts early this month.

Consolidated revenue declined 9 per cent to HK$6.15 billion from HK$6.73 billion the previous year.

Hutchison Telecom's mobile business revenue fell 15 per cent to HK$4.45 billion as hardware sales slid 28 per cent owing to the lack of popular new smartphone models. Apple, for example, has not updated the iPhone 5 since it was introduced in the city in September last year.

Wong said gross average monthly revenue per user, which included customer spending on mobile phones under tariff plans, reached HK$258 in the first half. That figure is expected to rise further next year as 3G and 4G data usage increases.

Turnover at the fixed-line business grew 12 per cent to HK$1.93 billion from HK$1.72 billion on the back of strong business from other network services providers.

Additional reporting by Rachel Butt