Warning of disruption to mobile users over expansion of 3G telecom market

Consumer chief raises fears over idea to expand city's 3G market, saying that splitting services to allow in another operator could be detrimental

PUBLISHED : Sunday, 13 October, 2013, 12:00am
UPDATED : Monday, 14 October, 2013, 2:00pm

Hong Kong's top consumer rights advocate has described a possible shake-up in the city's 3G mobile market as her "top concern" and questioned the idea that more competition would be a good thing.

Consumer Council chief executive Gilly Wong Fung-han says the potential disruption from splitting services among more operators was worrying because of the huge number of mobile users it could affect.

Speaking publicly for the first time on the issue, Wong told the Sunday Morning Post in an exclusive interview: "Right now we have two different stories - from the telecom operators, who say it will be very detrimental, producing a 27 per cent degradation in service, and the government, which says 9 per cent.

"There is a huge difference between the two figures presented to the public."

State-owned giant China Mobile, the world's biggest mobile operator with 750 million customers, said it would be interested in seeking a licence to capture a slice of the 11 million-strong 3G and 4G Hong Kong market.

But the big four 3G mobile operators - HKT (PCCW), SmarTone, CSL (one2free) and 3 Hong Kong (Hutchison Telecom) - have come out against more competition.

One option is to keep the status quo, the second is to put the whole spectrum up for public auction and the third would see an equal share taken from the operators and put to auction, paving the way for a new player.

If more competition is granted, mobile users could be the big losers, facing higher prices and poorer network signals.

The Office for the Communications Authority (Ofca), the industry regulator, will decide whether more competition and a fifth player - possibly China Mobile - is needed by the end of this month.

Wong said: "From a consumer protection standpoint, the school of thought is always having more competition, more choice for consumers and more innovation value.

"People have already said Hong Kong is a highly competitive market. But there is a question mark over whether we can accommodate one more player in the market."

The impact of a fresh competitor and the overhaul of signal distribution would be equivalent to converting the Cross-Harbour road tunnel for MTR use only.

Plum Consulting, a British firm hired by the telecom operators, said it arrived at the 27 per cent figure - weighted across the four networks - after assessing all their infrastructure capacity.

In a worst-case scenario, the operator most reliant on 3G services faced a 39 per cent loss in network signals. But technical experts said the impact on signal quality depended on whether operators were using all available space for 3G services. HSBC research revealed SmarTone "has deep broad-spectrum holdings and significant excess network capacity". SmarTone declined to comment.

Disruption to output would affect all users connected to 3G, including on 4G, as when it is not available the signal is downgraded to 3G automatically.

It could take 70 seconds longer to download a YouTube video and calls would be prone to more dropouts and static interference.

Peter Koo Heung-shing, a partner at professional services firm Deloitte China, said the mobile market looked "a little saturated". Koo said that with 1.5 phones per customer, the market was already "highly penetrated".

Operators have warned that bills will rise. Alex Arena, group managing director at HKT, the biggest telecommunications operator, previously estimated bills would rise by HK$360 a year.

Users are already experiencing patchy services on the city's 3G network. One2free 4G customer Josh Tam Siu-hay, 32, said he relied on the 3G network at home in Yuen Long.

"I've had calls drop, and my iPhone says 'call failed,'" Tam said. "A big impact in my service quality would be devastating."

Wong said: "If the direction is to auction some of the spectrum, all measures to minimise the impact to consumers are very important and we have voiced this to the government already."