Hong Kong aims for cheaper, faster 5G roll-out with proposal to not charge telcos for spectrum

City is in race with other developed economies to implement technology for speedier internet and more simultaneously connected devices

PUBLISHED : Friday, 27 July, 2018, 11:01am
UPDATED : Friday, 27 July, 2018, 3:16pm

Hongkongers may get cheaper rates for superfast 5G mobile broadband services if a government plan to lower costs and speed up the deployment of the necessary networks goes ahead.

On Thursday, the city’s communications authorities proposed to not charge telcos for the use of spectrum – or radio frequencies – that would allow data to be transferred 20 times faster than existing speeds.

Instead, it would assign 4,100 megahertz of spectrum in the high-frequency, high-capacity 26 Ghz and 28 Ghz bands to telcos. This would apply if demand is below 75 per cent of supply.

Secretary for Commerce and Economic Development Edward Yau Tang-wah said it was appropriate not to call an open auction for spectrum given its “abundant supply”.


“That means it will greatly reduce the cost and also shorten the time involved,” Yau said, referring to the roll-out of 5G networks by service providers.

“We all know that 5G is not just for communication. It is also for the Internet of Things, smart city and lots of technology applications,” he said. The Internet of Things refers to a network of devices – anything from phones and computers to home appliances and microchips – that wirelessly connect to the internet and to each other.

We all know that 5G is not just for communication. It is also for the Internet of Things, smart city and lots of technology applications
Edward Yau, secretary for commerce and economic development

Hong Kong is in a race with other developed economies to implement technology that will allow mobile networks to support a huge number of simultaneous connections and improved speeds compared with current 3G and 4G systems. Most countries are expected to start offering 5G networks from 2020, and some, like Britain, have auctioned spectrum to telcos.

On a 5G network, users will have no difficulty surfing the internet in crowded places compared to older generation networks. Some estimates suggest they will even be able to download a full-length high-definition movie in just one second.

Though the proposal could lead to lower costs, the Communications Authority cautioned that mobile phone subscription rates were affected by market competition and data usage, and telcos’ spectrum utilisation charges usually made up only 3 to 4 per cent of their operational costs.

Deputy director general for telecommunications Chaucer Leung Chung-yin said industry players who earlier responded to an invitation to express interest in the high-frequency spectrum wanted less than 75 per cent of what was available.

Telecoms regulator to ensure Hong Kong keeps apace in 5G race

On Thursday, at the launch of a public consultation on the proposal, the authorities said that telcos and new entrants to the market could submit applications for high-frequency spectrum from the end of this year to early next year.

The spectrum is likely to be available from April next year, so that operators can begin planning to launch their 5G services in 2020.

Those who are assigned high-frequency spectrum will need to install a minimum of 5,000 radio base stations, as the bands are limited to small cell coverage.

At the same time, the government announced an additional 200 MHz of spectrum at the lower-frequency, lower-capacity bands of 4.9 GHz and 3.3 GHz. A public consultation will be launched later this year, and the spectrum will be available for use in the third quarter of next year.

Francis Fong Po-kiu, honorary president of the Hong Kong Information Technology Federation, welcomed the move.

“The medium-frequency band would be very important as to ensure the wide area coverage of 5G services over the city,” he said, adding that he hoped the government would work fast. South Korea, he noted, would step into the 5G era in March next year.