Hutchison Telecommunications Hong Kong, which posted solid financial results for last year, plans to marshal its resources to add more mobile spectrum and keep its existing spectrum holdings to meet rising data services requirements.
Chief executive Peter Wong King-fai said yesterday: "If we don't increase spectrum or keep previous spectrum [licensed to the company], it will affect service to our customers."
Hutchison Telecom, SmarTone Telecommunications, CSL and PCCW's HKT have formed a united front to renew their existing 3G spectrum allocations, while competing in the latest government auction of new 4G mobile spectrum. Their respective 3G spectrum licences are due to expire in October 2016.
An option that the government apparently favours is to take a third of each of the four mobile network operators' current 3G spectrum allocation and auction these off. China Mobile, the world's largest wireless network operator, has expressed support for the plan.
The government, led by the Communications Authority, will decide on which way to go this October after the conclusion of its public consultation on April 11.
Wong said: "Over the years, we have used a lot of resources to develop that 3G spectrum. We don't want to see the operators and the government going to court to resolve this issue."
Yesterday the Communications Authority completed its eighth radio spectrum auction since 2001. A total of HK$1.54 billion in so-called spectrum utilisation fees were submitted for 50 megahertz of new 4G mobile spectrum in the 2.5 gigahertz and 2.6GHz bands.
SmarTone was the most aggressive auction participant, with a HK$640 million bid for the two chunks of spectrum that it won. Genius Brand, a joint venture between Hutchison Telecom and HKT, bid HK$290 million for a single spectrum slice.
CSL bid HK$310 million for its spectrum allocation, while China Mobile's local subsidiary bid HK$300 million for its share of spectrum.
Hutchison Telecom, which operates wireless and fixed-line networks, reported yesterday a 20 per cent rise in net profit last year to HK$1.23 billion, largely driven by "robust" demand for smart devices and data services. Revenue rose 16 per cent to HK$15.54 billion from HK$13.41 billion.
Wong said Hutchison Telecom's capital expenditure this year would be between HK$1.3 billion and HK$1.4 billion, down from HK$1.6 billion last year. He declined to predict whether expenditure would rise if the government's 3G re-auction plan pushes through and spectrum licence fees balloon.