Hong Kong’s Communications Authority responded to operator criticism about its 3G spectrum re-auction plan, in the hope of quelling fears.

As things stand, a total of 120MHz spectrum in the 2.1GHz frequency band will expire in October 2016. And under CA’s “hybrid approach”, CA will re-assign one third of this chunk of 3G spectrum through an auction open to both incumbents and new entrants.

“This 40 MHz of 3G spectrum represents only 7-10 per cent of the total spectrum holdings of the individual incumbent 3G operators,” said CA in a statement.

The regulator added that if any of the incumbent 3G operators were unable to acquire the re-auctioned spectrum – or simply chose not to – they would still have two years after the auction (scheduled for the second half of 2014) to adjust their network and business plans “so that satisfactory customer services will be ensured”.

Hong Kong’s operators have also expressed concern that re-auction of 3G spectrum might lead to higher SUFs – spectrum utilisation fees – which is a separate charge levied by the regulator on top of the auction price.

Again, CA sought to allay those anxieties, pointing out that SUF estimates paid by incumbent 3G operators for re-auctioned spectrum is only about 0.5 per cent of their total annual operating costs.

“A total of eight spectrum auctions have been conducted since the assignment of the 3G spectrum through auction in 2001, and so far we have not found any correlation between the spectrum prices as determined by auction and service charges,” said CA in a statement.

On consumer prices and network capacity, CA is equally sanguine. Hong Kong’s keenly competitive market, says the regulator, will ensure that mobile service charges will “remain highly affordable and competitive by international standards”.

Moreover, it argued, there is “ample capacity” available on the 4G networks of the incumbent 3G operators.

“If the incumbent 3G operators which are unable or choose not to acquire the re-auctioned spectrum could use their 4G network capacity efficiently, they would be able to ensure that customer service quality would not be affected in any manner when the 10MHz of 3G spectrum [from each of Hong Kong’s four operators] is handed over in October 2016,” CA said.