Press Releases of January 2000
	OFTA Appoints Citibank N.A. as the Intermediary for the Collection of Universal Service Contribution
	OFTA Announces Result of Investigation into the Simultaneous Price Changes of Mobile Telephone Operators
	Press Release Issued by Information Technology and Broadcasting Bureau on 18 Janaury 2000 - New licences to operate local, external FTNS services offered
	Successful Rollover to Y2K by Telecoms Sector

The Office of the Telecommunications Authority (OFTA) announces today that Citibank N. A. has been appointed as the intermediary for the collection of Universal Service Contribution (USC) for the period from January 1999 to March 2000.

USC is an amount of money paid for by external telecommunications service providers to Cable & Wireless HKT Telephone Limited (CWHKTC) to compensate the company for providing local telephone services to uneconomic customers who would not otherwise be served on commercial grounds. The total sum of USC is determined by the Telecommunications Authority (TA).

In recognition of the need to preserve sensitive commercial information with the liberalisation of external telecommunications services in January 1999, there is a need for the TA to appoint an independent and neutral intermediary body for the settlement of the USC between CWHKTC and the contributing parties.

Previously, USC was collected by Cable & Wireless HKT International Limited (CWHKTI), who had been the sole external public external telephone service provider. However, as from January 1999, this collection mechanism is considered not appropriate because CWHKTI can no longer get hold of all the information on external traffic under the liberalised regime.

"The arrangement of appointing a third party to collect the USC has won overwhelming support from the operators during a consultation exercise in last April, " said a spokesperson of OFTA.

Citibank N. A. is selected from 17 bidders including banks, law firms and audit companies following an extensive tender exercise last year conducted by OFTA, taking into consideration various criteria including reputation, size of establishments, independence and cost-effectiveness.

The first billing cycle will begin on 21 February 2000.

Office of the Telecommunications Authority
25 January 2000

The Office of the Telecommunications Authority (OFTA) today announces that the investigation into the simultaneous price adjustments that have taken place on 2 January 2000 has been completed.

In an investigation report issued by the Telecommunications Authority (TA), the TA has examined the evidence available before him and has formed the opinion that some kind of understanding must have existed among the mobile telephone operators which have led to the simultaneous increase of prices on 2 January 2000. He is of the view that such understanding is tantamount to an "arrangement" prohibited under the licence condition of the mobile telephone operators. However, having seen the draft report of the TA, all the six mobile operators had agreed to voluntarily withdraw their price increases.

In view of the above, the TA decided that there would be no need for him to proceed to issuing a direction. He has therefore written to all licensees warning them to be cautious of any behaviour that could be in breach of their licence obligations.

"In the highly competitive telecommunications market, it is vital for us to maintain a fair and open market environment to safeguard the interests of consumers as well as investors in the market," said Anthony S K Wong, the Telecommunications Authority.

"The government has already proposed amendments to the Telecommunication Ordinance in order to enhance our regulatory role as well as to increase penalties for breaches of the law," added Mr Wong.

The full report of the investigation can be viewed at OFTA's website at http://www.ofta.gov.hk under Competition Bulletin.

Office of the Telecommunications Authority
20 January 2000

The Secretary for Information Technology and Broadcasting, Mr K C Kwong, announced today (Tuesday) that the Telecommunications Authority (TA) had decided to issue five licences for local fixed telecommunication network services (FTNS) using wireless networks, twelve licences for external FTNS using satellites to and from Hong Kong and to issue to Hong Kong Cable TV an FTNS licence to provide telecommunications services over its hybrid fibre coaxial cable (HFC) networks.

"Hong Kong has taken a major step forward in liberalising the telecommunications market for both local and external facilities-based services." Mr Kwong said at a press conference.

He announced the five successful applicants which would be offered the local wireless FTNS licences set out at Annex A. The twelve external satellite-based FTNS licences are issued to companies at Annex B. Successful applicants include local and foreign companies.

"We are very encouraged by the positive response from the market to our invitation for applications. All applications were carefully assessed in strict accordance with the respective sets of criteria laid down in the Guidance Notes issued to invite applications," Mr Kwong stressed.

A key issue concerning the licensing of local wireless FTNS is the number of licences to be issued. "Having considered the availability of radio spectrum against the requirements for the efficient operation of local wireless FTNS, the TA decided to issue five licences. This will give the five operators adequate bandwidth upon service launch and allow sufficient reserve bandwidth for future growth in customers and introduction new services by the licensees," Mr Kwong explained.

The TA will offer the licence to the five applicants which attained the highest scores in the evaluation exercise. They have proposed to the TA performance bonds ranging from HK$35 million to HK$352 million, to guarantee their commitments to service launch date, capital expenditure, and service coverage by specified number of communication hubs and buildings.

Mr Kwong said, "We welcome the greater competition in the local fixed telecommunications market which will result from the new services to be provided by the five wireless FTNS licensees. These companies have pledged a total investment of HK$2.8 billion in the next three years. All the five new networks will be able to offer broadband services. They will roll-out their networks covering different districts throughout Hong Kong. The enhanced competition will lead to improvements in the quality of service, bring innovation and provide choice to customers."

On the external telecommunications facilities based on satellites, the TA has concluded that there is no physical constraint which would limit the number of licences to be issued during the current exercise. The TA has therefore decided to issue licences to all applicants who meet the licensing criteria published in the Guidance Note and who agree to offer a performance bond of HK$ 3 million to guarantee their commitments on service launch date, capital expenditure and capacity of external facilities to be provided.

"This is an important step in our policy to progressively liberalise the facilities-based market from 1st January 2000. The twelve licensees have pledged a total investment of HK$770 million and the facilities which they have proposed will increase our external telecommunications capacity by 3 Gigabits per second (Gbps) in three years."

The TA has also decided to issue Hong Kong Cable TV an FTNS licence to provide telecommunications services over its HFC network. Hong Kong Cable TV has made binding commitments on the roll-out of its cable network and agreed to return its Microwave Multipoint Distribution System (MMDS) frequencies according to the agreed schedule.

"Hong Kong Cable TV plans to launch a cable modem service, which is a broadband service for Internet access. Its HFC network will roll-out from 957,000 premises passed in end 1999 to 1,737,000 by end 2002, involving a capital investment of about HK$580 million. It has offered a performance bond of HK$50 million for its commitments," Mr Kwong said.

"Our policies to progressively liberalise the telecommunications market are bearing fruit. The new wireless FTNS and external facilities licensees as well as Hong Kong Cable TV will bring in substantial additional private investment, totalling about $4.1 billion in the next three years. They will enhance our telecommunications infrastructure by providing additional broadband services locally as well as increasing our external telecommunications capacity. This will ensure that Hong Kong will have an excellent telecommunications platform for sustainable economic growth in the Information Age," Mr Kwong emphasised.

"This will also help to strengthen Hong Kong's position as a leading telecommunications, Internet and broadcasting hub in the Asia Pacific region. The overall economic benefits to our economy, including creation of jobs, will be considerable."

Background

In accordance with the policy objectives of the Government announced on 5 May 1999 to progressively liberalise the telecommunications market, the TA invited and received a total of 14 proposals for local fixed wireless FTNS licences and 20 for external satellite-based FTNS licences when applications closed on 30 September 1999. The response from the market has exceeded expectations.

Two Working Groups, comprising members from the Office of the Telecommunications Authority and the Information Technology and Broadcasting Bureau, with the Independent Commission Against Corruption as an observer, were formed to evaluate the applications and to make recommendations to TA. Their applications were carefully assessed in strict accordance with the respective sets of criteria laid down in the Guidance Notes for invitation of applications the TA issued in July 1999.

Having considered the availability of radio spectrum against the requirements for the efficient operation of local wireless FTNS, the TA decided to issue five licences. This will give the five operators adequate bandwidth upon service launch and allow sufficient reserve bandwidth for future growth in customers and introduction new services by the licensees. The TA will offer licences to the five applicants which have attained the highest scores against the evaluation criteria laid down in the Guidance Note. The prospective licensees had been duly advised during the evaluation process that the TA intended to issue five licences. They therefore have full knowledge of the likely degree of competition in the new operating environment.

As regards external satellite-based facilities licences, the TA has decided that there is no physical constraint on the number of such licences to be issued in this exercise. The TA has therefore decided to license all applicants which meet the evaluation criteria laid down in the Guidance Note. After the current exercise, the TA will shortly invite new applications for external satellite-based facilities licences.

After accepting that Hong Kong Cable TV's application has met the licensing criteria, the TA issued a draft FTNS licence to Hong Kong Cable TV. It confirmed its acceptance to the TA on 17 January 2000.

ENDS/Tuesday, January 18, 2000 NNNN

Annex A

獲 批 固 網 服 務 牌 照 營 辦 本 地 無 線 網 絡 服 務 的
五 家 公 司 一 覽 表

List of Five Successful Applicants for
Local Wireless FTNS Licences

1. PSINet Hong Kong Limited
2. 香 港 網 絡 拓 展 有 限 公 司 (HKNet-Teligent Company Limited)
3. 香 港 寬 頻 有 限 公 司 (Hong Kong Broadband Network Limited)
4. 裕 基 科 技 有 限 公 司 (Eastar Technology Limited)
5. 數 碼 通 電 訊 有 限 公 司 (SmarTone Mobile Communications Limited)

Annex B

獲 批 固 網 服 務 牌 照 利 用  星 提 供 對 外 電 訊 設 施 的
12 家 公 司 一 覽 表

List of 12 Successful Applicants for
External Satellite-based FTNS Licences

1. Hutchison Telecommunications Technology Investment Ltd.
2. NTT Com Asia Ltd.
3. Pacific Century Matrix (HK) Ltd.
4. PSINet Hong Kong Limited
5. Teleglobe Hong Kong Ltd.
6. 中 國 衛 星 寬 頻 網 絡 有 限 公 司 (China Digital satNet Limited)
7. 亞 洲 衛 星 有 限 公 司 (Asia Satellite Telecommunications Co. Ltd.)
8. 城 市 電 訊 國 際 有 限 公 司 (CTI International Ltd.)
9. 萬 方 科 技 有 限 公 司 (Million Point Technology Ltd.)
10. 遠 東 電 信 服 務 有 限 公 司 (Far East Gateway Ltd.)
11. 銀 河 衛 星 廣 播 有 限 公 司 (Galaxy Satellite Broadcasting Ltd.)
12. 數 碼 通 電 訊 有 限 公 司 (SmarTone Mobile Communications Ltd.)

The Office of the Telecommunications Authority (OFTA) announced this morning that the telecommunications sector of Hong Kong has successfully rolled over to Y2K.

"As at 8:30 am today, we have not received any Y2K-induced failure reports from telecommunications service providers," said a spokesperson from OFTA. "The operation of the telecommunications services in Hong Kong had not been affected by any Y2K problem during the rollover."

"While we are pleased to make this announcement, we would continue to monitor the situation closely," stressed the spokesperson.

Office of the Telecommunications Authority
1 January 2000