Richard Li Tzar-kai

HKT reiterates call for spectrum trading in Hong Kong to help bolster the city’s 5G preparations

PUBLISHED : Thursday, 19 January, 2017, 6:04pm
UPDATED : Thursday, 19 January, 2017, 6:04pm

HKT, the largest telecommunications services provider in Hong Kong, on Wednesday stepped up its campaign for 5G preparations in the city by calling on the government to implement spectrum trading among the city’s four incumbent mobile network operators.

In the third of its series of papers on mobile spectrum, HKT asked: “Why are we waiting?”

The company last year threw the spotlight on the government’s delay in implementing mobile spectrum trading in Hong Kong, following industry concerns that the government’s latest spectrum reassignment proposal could disrupt wireless network operations and significantly raise the cost of mobile communications services in the city.

In response to HKT’s inquiry last year, the Commerce and Economic Development Bureau said in a letter dated April 27 that spectrum trading was again on its agenda, and a consultant would be asked to re-visit the issue. This consultancy study is planned to be completed this year.

Spectrum trading permits holders of radio spectrum to buy and sell these resources amongst themselves at any time, without intervention by the government.

London-based commercial law firm Preiskel & Co said in a report in March last year that there are already well-functioning spectrum trading markets in Britain, most European Union countries, the United States, Canada, Malaysia, Singapore, Taiwan, India and Australia.

“Spectrum trading provides a commercial mechanism to assist the government in clearing spectrum bands and re-farming spectrum,” HKT said.

The company, which is the telecommunications arm of tycoon Richard Li Tzar-kai’s PCCW group, pointed out that spectrum trading encourages the efficient use of this scarce resource, “which brings important benefits to consumers in terms of broader services availability, such as 5G and the internet of things”.

It added that the initiative would help provide “better service quality, lower prices, increased investment and innovation, and enhanced competition”.

According to the HKT paper, “mobile-to-mobile” spectrum trading allows wireless network operators to buy and sell spectrum between themselves, which would allow the operators to manage their spectrum resources based on prevailing market conditions.

“Any-to-any” spectrum trading, by comparison, represents the fastest way to free up under-utilised spectrum because this allows trades between spectrum holders in any frequency band. For example, a broadcaster can sell its spectrum to a mobile operator.

That type of trading “would allow market forces to align the use of spectrum with demand, and provide mobile operators with an opportunity to acquire more spectrum to meet the continuing exponential growth in demand for mobile data traffic”, HKT said.

Last week, HKT’s paper on spectrum supply in Hong Kong raised industry concerns about the need for an updated mobile spectrum release road map by the government in light of the expedited 5G preparations in other major economies, including mainland China.

“New spectrum in the 3.5 gigahertz and 700-megahertz bands need to be released this year,” Henry Wong, the head of strategic wireless technology and core networks at HKT, told the South China Morning Post. “Hong Kong has been a leader in mobile services for the past 30 years, but further delays in releasing new spectrum for 5G could see the city seriously lagging behind.”

The 700MHz band is currently used for analogue television broadcast services, while the 3.5GHz band is currently allocated for satellite services.

The Office of the Communications Authority (Ofca) said last week that the government plans to allocate the 700MHz band spectrum for mobile services “after the switch-off of the analogue television services and upon completion of frequency coordination with the mainland regulatory bodies”.

Ofca said it would provide assistance to HKT if the operator confirms its previously stated interest to conduct a mobile service technical trial for the 3.4GHz to 3.6GHz band, which would examine the potential impact on existing satellite services.

Last month, HKT warned that the “admin fee” charged by the telecommunications industry to each consumer would rise significantly by 2021, as the government continues to drive up the cost and limit the availability of mobile spectrum in the city.