The Hong Kong government modified its plan to reassign more than a third of the territories’ total mobile spectrum, proposing a hybrid approach combining a so-called administrative assignment with an auction of 200MHz of airwaves.
The hybrid method, which was used in its last spectrum assignment in 2014, would give operators the right of first refusal on 40 per cent of their existing spectrum holding in the expiring bands, with the other 60 per cent put up for auction. If an operator opts to refuse to retain its existing holding, the spectrum would be put in the auction pool.
A second public consultation was opened by the Communications Authority (CA) covering the proposed method for setting the spectrum utilisation fee (SUF) and arrangements for reassigning spectrum in the 900MHz and 1800MHz bands after the expiry of current assignments between November 2020 and September 2021. The consultation closes on 24 April.
The government launched the first public consultation a year ago and closed it in mid-May. The Office of the Communications Authority (OFCA) doesn’t plan to release more spectrum unitl after 2019.
Hong Kong’s largest telecoms operator HKT criticised OFCA’s spectrum management policy and claimed the territory is falling behind in 5G development because it lacks a forward looking government spectrum policy. It is concerned the government is not doing enough to release more spectrum and warned other countries, including China, could move onto 5G services well before Hong Kong.
The market leader recently applauded Ofcom, the telecoms regulator in the UK, for taking the lead to make spectrum available to enable the development of “true 5G technology”. Ofcom last week set out its timeline for spectrum allocation and anticipated deployment of 5G.
Hong Kong’s second consultation paper proposes setting the reserve price for the auctioned spectrum by benchmarking against the reserve prices of the two most recent auctions in 2013 and 2014. Analysts reckon the methods proposed for determining the SUF and the reserve price could once again lead to extremely high spectrum prices for the two bands. The spectrum assignments will be for 15 years.
CA’s proposal was based on 325 submissions receiving during the first round and a 120-page consultancy study by Plum Consulting.
Hong Kong has four mobile operators: HKT, Hutchison Telecommunications (3 Hong Kong), SmarTone and China Mobile.