Telecoms regulator draws up new ‘hybrid approach’ for city’s mobile spectrum reassignment

PUBLISHED : Tuesday, 14 February, 2017, 9:59pm
UPDATED : Wednesday, 15 February, 2017, 8:13am

The Hong Kong government has tweaked its plan to reassign a large batch of the city’s mobile frequency spectrum, as it launched on Tuesday a second round of public consultation on the proposed arrangements.

The announcement by industry regulator the Communications Authority (CA) and the Secretary for Commerce and Economic Development, Gregory So Kam-leung, has come amid calls for the government’s release of fresh spectrum to support the city’s 5G preparations and the adoption of spectrum trading between telecommunications network operators.

Based on the 325 submissions received in the first round of public consultation from February 3 to May 18 last year, as well as the findings of a consultancy study, the government has drawn up a “hybrid approach”, which combines the administrative assignment and auction of 200 megahertz of frequency spectrum in the 900MHz and 1800MHz bands, the deputy director-general of the Office of the Communications Authority, Chaucer Leung, said in a media briefing on Tuesday.

The licensed frequency spectrum on those two bands account for 36 per cent of the total 552MHz of spectrum currently assigned for use in mobile communications services, according to the CA.

It estimated that there are 50 megahertz of spectrum in the 900MHz band and 150 megahertz in the 1800MHz band.

The existing network operator assignments for those bands are due to expire between November 2020 and September 2021, it said.

The government’s proposed new arrangement will have 40 per cent of the spectrum on those two bands reassigned to each of the four incumbent spectrum assignees through the offer of “right of first refusal”.

According to the CA, the remaining 60 per cent will be reassigned by way of auction.

Any spectrum which may become available because an incumbent spectrum assignee did not take up the right of first refusal offer will be included in the pool of spectrum up for auction.

The incumbent mobile network operators are HKT, Hutchison Telecommunications Hong Kong, SmarTone Telecommunications and China Mobile Hong Kong.

“The need to safeguard the provision of 4G service at certain MTR premises and to ensure no adverse impact upon 2G service subscribers post spectrum reassignment from 2021 onwards constitute the overriding public policy reasons for deviating partially from the full-fledged market-based approach for spectrum reassignment,” a CA spokesman said.

According to the government-commissioned technical study by British firm Plum Consulting, voice-centric 2G services are still being provided over the 900MHz and 1800MHz bands in Hong Kong.

In the first round of public consultation last year, the government’s three options included: renewing the licenses of the incumbent mobile network operators; take back the entire assigned 900MHz and 1800MHz spectrum, and auction them off; and retain 20 per cent of the spectrum for the incumbent operators and auction off 80 per cent of that spectrum.

A spokeswoman for HKT told the South China Morning Post that the operator will study the proposed new arrangement and respond when it is appropriate.

HKT, the city’s largest telecommunications services provider, has raised its industry’s concerns about the need for an updated mobile spectrum supply road map by the government in light of developments in other markets.

In a statement, Hutchison Telecom said: “We believe that any spectrum arrangement should take public interest and user experience into first consideration, and ensure that all mobile telecommunications operators could continue to provide quality service.”

The Hong Kong government has decided not to release any new mobile spectrum to operators from this year to 2019. There was also no new spectrum made available in the past three years.

By comparison, the governments of Britain, Japan, the United States and mainland China have already cleared the 3.5 gigahertz band for 5G trials in their markets, while awaiting global industry standards for 5G to be finalised.

HKT has called for the release of new spectrum in the 3.5GHz and 700MHz bands this year. In Hong Kong, the 3.5GHz band is currently allocated for satellite services, while the 700MHz band is used for analogue television broadcast services.