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Hong Kong to unveil decision on 3G licence debacle

"Before mid-November" is the deadline Hong Kong's communications authority has set to announce its decision on how the territory's next 3G licenses will be awarded when they expire in 2016.
Written by Eileen Yu, Senior Contributing Editor

Hong Kong authorities will announce their final decision "before mid-November" regarding the territory's next 3G auction, 

Current 3G licenses in Hong Kong will expire in 2016.

The Office of the Communications Authority (OFCA), which operates under the Chinese territory's Commerce and Economic Development Bureau, said it will be ready with its decision on how 3G licenses will be awarded after existing ones expire in 2016.  

"The Communications Authority would endeavor to announce the decision as early as possible in the first half of November, around three years prior to the expiry of the spectrum assignment concerned," an OFCA spokesperson said. "[This will enable] the incumbent operators, if necessary, [to] make the required technical and commercial arrangements [in a timely fashion] to ensure the continued provision of quality services to customers."

The authority was originally set to announce its plan by end-October, according to a report Thursday by South China Morning Post (SCMP), which added that no reason was given for the delay. The report alluded to a possible link to the government's recent decision not to grant a free-to-air TV license to HKTV last month, which sparked protests across the territory.

SCMP quoted Charles Mok, a member of Legco's panel on IT and broadcasting, to say: "The government did not give a good explanation as to why the announcement was delayed, [but] I wouldn't be surprised if this is a political decision." Legco is the Legislative Council of the Hong Kong Special Administrative Region. 

OFCA is expected to select one of three proposals to award the licenses. First, it keeps the status quo by renewing all existing 3G licenses. Second, it will hold an auction to decide the licensees. Third, it reclaims equal portions of spectrum from existing operators to create enough for a new fifth player, as part of the government's efforts to boost market competition. 

In March, the current four mobile operators in Hong Kong--CSL, Hutchinson, PCCW-HKT, and SmarTone--had threatened to file suit against the government should it decide on the third option, which they said was pitched primarily to allow China Mobile into the market. This proposal would result in a third of their current spectrum to be shaved off for the new player. The operators further argued that the smaller spectrum would affect quality of service, resulting in dropped calls and congested networks, and intensify competition in a market that is already highly competitive. 

According to the SCMP report, the operators said mobile signal could be degraded by 27 percent should they lose the spectrum.

State-owned China Mobile is pipped as the only potential beneficiary, and interested party, of the new 3G license if Hong Kong takes the third option. The Chinese operator is already the world's biggest mobile player with over 740 million subscribers. 

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