PCCW starts legal battle to block auction of 3G mobile phone spectrum

PCCW has launched a legal fight to overturn a controversial government decision to shake up the telecommunications sector by claiming back a third of the city's 3G mobile spectrum and auctioning it off later this year.

The telecoms giant - which dominates the city's HK$63 billion phone industry through its mobile subsidiary HKT - is challenging the decision taken in November by the Communications Authority on the grounds that it is "unlawful and irrational".

The regulator said it aimed to boost competition by taking back a third of the 3G spectrum held by four incumbent mobile phone firms - HKT, CSL New World Mobility, Hutchison Telephone and SmarTone.

It then plans to auction it off and reassign it when the current licences expire in October 2016.

The decision was criticised in some quarters for being made under political pressure to help state-owned China Mobile expand in Hong Kong's mobile market - a claim denied by Communications Authority chairman Ambrose Ho Pui-him at a Legco meeting last month.

China Mobile, the world's largest wireless network operator, does not have a 3G licence in Hong Kong but rents spectrum, or the bandwidth needed to provide mobile services, from other operators.

It has expressed interest in bidding for a licence.