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Hong Kong Spectrum Auction

Gabriela Kennedy

29 March 2011

Written by Gabriela Kennedy in Hong Kong and Gerry Oberst in Brussels

The Hong Kong Office of the Telecommunications Authority (OFTA) has been actively looking at furthering spectrum utilization in Hong Kong. Spectrum auctions for the provision of public mobile telecommunications services in the 850 MHz, 900 MHz and 2GHz Bands were held in 2010 and auctions for the provision of broadband wireless access services of 90MHz in the 2.3 GHz band and 105 MHz in the 2.5/2.6 bands were held in 2009.

The regulator's view remains that the mobile telecommunications industry needs to invest in additional network capacity to meet consumer demand. On March 3 2011, OFTA announced the results. Four bidders participated over four days of auction rounds. In its March 3 announcement on the UHF band auction, OFTA noted that the 

mobile telecommunications service market has continued to boom in recent years.” In particular, “mobile data usage has witnessed an explosive growth with a year-on-year increase of 189%” according to the regulator.

Key telecommunications statistics were released by OFTA on March 25 of its auction of 20 MHz of spectrum in the 850 MHz and 900 MHz UFH bands, which achieved total spectrum utilization fees of HK$1.952 billion (approximately USD$ 250 billion, € 180 billion).

OFTA is also of the view that capacity in the BWA space needs to be developed in order to enable Hong Kong to become an advanced wireless city. On March 9, OFTA issued a statement of its intent (PDF). Last year, the regulator invited parties to indicate their interest in bidding for the 90 MHz of radio spectrum in the 2.3 GHz band that had been "left over" from the 2009 auction. Based on these submissions OFTA has decided to conduct the auction. In its statement OFTA noted that

the mobile market in Hong Kong remains one of the most competitive in the world, with the operators competing fiercely with one another on price and innovative service.” 

As a result, the regulator has decided not to exclude incumbent operators who won spectrum in the earlier auction from bidding in this latest auction round. The available spectrum will be divided into three blocks of 30 MHz, available for 15 year licenses. Operators will have flexibility to provide different services, although it is expected that they will use TDD technology (which enables more communication capacity to be dynamically allocated). If they provide mobile service, a minimum 50% population coverage and 5 year build-out requirement will apply to open bidding for the 2.3 GHz spectrum.

Only companies incorporated in Hong Kong are qualified to take part in the auction. The auction rules and licensing arrangements used for the 2009 auction are likely to be adopted. 

Gabriela Kennedy

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