3G mobile phone licence controversy looms for Hong Kong regulators

Another licence storm could be brewing for Greg So Kam-leung, with an announcement overdue on the future of Hong Kong's 3G mobile phone market

PUBLISHED : Thursday, 07 November, 2013, 11:43pm
UPDATED : Friday, 08 November, 2013, 7:08am

With the free-to-air television licensing controversy still raging, it could be a case of out of the frying pan into the fire for Greg So Kam-leung and his Commerce and Economic Development Bureau in the coming days.

The Office of the Communications Authority [Ofca] - a subordinate agency under the bureau - said it would announce the final decision over the fate of 3G mobile licences "before mid-November". The decision could affect millions of people's mobile phone and data services and lead to fresh furore.

The timing could not be more sensitive amid the political firestorm over television licences. In fact, the authority has already delayed the decision, originally set for the end of last month.

A spokeswoman for Ofca declined to explain last week why it was postponed. Lawmaker Charles Mok, a member of Legco's panel on information technology and broadcasting, said it couldn't be caused by the TV licensing arrangement fiasco.

"The government did not give a good explanation as to why the announcement was delayed. I wouldn't be surprised if this is a political decision."

Ofca will pick one of three proposals: keep the status quo by renewing all 3G mobile data licences; take back the licences and put them up for auction; or seize an equal share of spectrum from the operators to create a space for a new player.

Any change to the present setup will leave mainland state-owned giant China Mobile as the only potential beneficiary. The government said it was weighing up the options because it wanted to boost competition in the mobile market.

But in fact, China Mobile, the world's biggest telecoms operator with 750 million subscribers, is the only party interested in obtaining a new 3G licence in Hong Kong.

The big four Hong Kong 3G mobile operators - HKT (PCCW), SmarTone, CSL (One2free) and 3 Hong Kong (Hutchison Telecom) - have been vocal against more competition.

Xu Yan, associate dean at Hong Kong University of Science and Technology's School of Business and Management, said the regulator needed to carefully review the options against the evidence provided by all parties concerned before going public with their decision.

If the go-ahead is given to pursue more competition, 3G and 4G mobile users will face disruption for up to three years, with poorer-quality service and higher bills.

The big four operators estimate mobile signal will be downgraded by 27 per cent, if an equal share of spectrum is seized.

"The Communications Authority would endeavour to announce the decision as early as possible in the first half of November, around three years prior to the expiry of the spectrum assignment concerned," an Ofca spokeswoman said.

"[This is designed] so that the incumbent operators, if necessary, can make the required technical and commercial arrangements timely to ensure the continued provision of quality services to customers."