HK Announces Licensing Rules for 3G Mobile Services

The Hong Kong government announced Tuesday the licensing framework for Third Generation Mobile Services (3G) together with several important aspects of the regulatory framework.

A total four 3G licenses will be issued in the mid 2001 to provide sufficient spectrum for each operator to provide innovative, multimedia 3G services and ensure competition in the market, a spokesperson for the Information Technology and Broadcasting Bureau said.

"The decision we announce today is made after thorough consideration of the views from different sectors," the spokesperson said. "With responses being generally supportive, we have decided to conduct a pre-qualification exercise followed by spectrum auctioning, to select four 3G licensees."

The government has chosen a royalty-based proposal which requires the bidders to pay a certain percentage of their annual 3G revenue turnover determined by the auction. The royalty payment will be subject to a guaranteed, minimum payment.

This method will encourage market entry and allow the government to share the upside of the future 3G services market, the spokesperson added.

The government is designing with our 3G consultants the details of the auctioning, which will include an efficient method to allocate the frequency bands to the four successful bidders, such as to conduct a final round of auction requiring a lump-sum cash bid.

The government has also announced a number of important regulatory conditions decided by the Telecommunications Authority, including the requirement that the 3G network licensees should make available at least 30 percent of their network capacity for access by non-affiliated Mobile Virtual Network Operators and content providers.

"The timely issue of 3G licenses will allow Hong Kong to enjoy 3G services at the same time as other advanced economies," the spokesperson stressed.

Hong Kong remains a leader in mobile services and technology, with a highly competitive market of six network operators, and high penetration rates of 76 percent.






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