HKT slams government for not doing enough in spectrum reassignment consultation

PUBLISHED : Thursday, 15 December, 2016, 11:01pm
UPDATED : Thursday, 15 December, 2016, 11:01pm

HKT, one of Hong Kong’s leading telecommunication operators, has criticised the city’s government for failing to increase public awareness and the potential negative impact on its plan to re-assign the city’s mobile services spectrum.

The operator has also accused the government of dragging its feet on implementing the trading of mobile spectrum, and for raising charges to operators steeply for using the spectrum.

“We are concerned that the consultation paper is superficial and no steps have been taken to really tell the Hong Kong public what the outcome of the government’s proposals will be other than the substantial financial enrichment to the government’s consolidated revenue,” HKT said in a press release late on Thursday.

The company separately issued an open letter detailing its complaints and arguments, addressing it to Gregory So, the Secretary of the Commerce & Economic Development Bureau, as well as Ambrose Ho, Chairman of the Office of the Communications Authority. Neither So nor Ho could be reached for response.

HKT claimed the government has not done enough to explain its proposals to the public, including the potential negative impact such as likely higher prices for mobile services.

It cited a recent survey commissioned by HKT that found over 90 per cent of respondents were not aware of the government’s consultation exercise being conducted.

HKT also said although the government has agreed to introduce spectrum trading as early as in 2007 and has commissioned in 2009 a study by a consultant which concluded that trading should be introduced, this has not happened so far.

“It has been at least six years since the study was commissioned, and now the government has decided to engage another consultant to re-look at the issue,” it said.

On pricing, HKT claimed that the fees charged by the government to mobile operators “has increased astronomically over the years.”

“Hong Kong spectrum prices are now the most expensive in the world,” it said. “Why does the government need to do this when it already has huge budget surpluses?”

HKT late last month suggested that the government use regional benchmarks to establish pricing for spectrum for mobile communications services ahead of their expiry in 2020 and 2021, while freeing up more spectrum for innovation purposes and allowing spectrum trading.

The Communications Authority and the Commerce & Economic Development Bureau launched a consultation in February on what the government should do when the licences of the city’s incumbent mobile network operators in the 900-megahertz and 1,800MHz bands expire. A decision is expected in November 2017.

In a joint statement, they said at the time that spectrum utilisation fees for the 3G reassignment contracts accounted for just 3 to 4 per cent of a mobile network operator’s operating expenditure, and operators were free to set their own pricing.

It added that the government was conducting a consultation on spectrum trading.

The government has three options which include: renewing the licences of the incumbent mobile network operators; taking back the entire assigned spectrum and auction it off; and retaining 20 per cent of the spectrum for the incumbent operators and auctioning off 80 per cent.

China Unicom, the country’s second-largest wireless network operator, in May expressed its support for the government’s latest proposal to reassign Hong Kong’s mobile spectrum, despite local industry concerns.

Unicom chairman and chief executive Wang Xiaochu said at the time, based on the city’s successful reassignment of 3G spectrum in 2014, Hong Kong consumers would ultimately benefit from the government’s plan.