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11 October 2002
The Telecommunications Authority
Waives
the Submission of Performance Bonds
in 2002
under Third Generation Mobile Services
Licences
The Telecommunications Authority (TA) announces
today (11 October 2002) the arrangement to waive the submission
of performance bonds due in October 2002 from the four licensees
for third generation (3G) mobile services. The bonds are in respect
of the sixth licence year.
"We have decided to give the 3G licensees
a one-year waiver on the submission of performance bonds to assist
the industry in response to changing market conditions. Our decision
is taken after careful consideration of needs of the industry
and the steps other Governments have taken to help their 3G licensees," said
a spokesperson of the Office of the Telecommunications Authority
(OFTA).
The 3G licensees have, on the grant of the licences
in October 2001, either submitted performance bonds to guarantee
the payment of the spectrum utilization fee (SUF) for the first
five years, or paid upfront the SUF for the first five years.
Therefore, the waiver of the performance bonds due this year
means that the Government has in hand guarantee for the payment
of the SUF or payment thereof for the next four years, rather
than for the next five years.
"The waiver does not affect Government revenue
as the licensees are still required to pay the SUF for all years
within the 15-year licence period," continued the OFTA spokesperson.
By accepting the waiver, the four licensees would
not be required to submit on 22 October 2002 a performance bond
to guarantee payment of the SUF of HK$60.124 million for the sixth
licence year to be called in the event of serious default. However,
those who have not done so already would still be required to
pay HK$50 million for the SUF of the first licence year by 22
October 2002.
Background
On 22 October 2001, the TA awarded
four 3G licences to Hong Kong CSL Limited, Hutchison 3G HK Limited,
SmarTone 3G Limited and SUNDAY 3G (Hong Kong) Limited.
2. Under the present licence conditions, the four
3G licensees must:
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(a) |
pay a SUF for each year - for the first five
years, the annual SUF is HK$50 million. From the sixth year
onwards, each will pay the higher of a rising minimum guaranteed
SUF, or 5% of their network turnover for the relevant year;
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(b) |
submit a five-year rolling guarantee by way
of a performance bond by a qualifying bank for each of the
annual minimum SUF - before the licensees took up their licences
on 22 October 2001, they submitted a HK$250 million bond, which
is equivalent to the SUF payment of the first five years.Note On
22 October 2002, each licensee must submit a performance bond
for the additional bonded sum for the sixth year, which is
HK$60.124 million. The Government should hold, as from 22 October
2002, a five-year rolling guarantee covering the second to
the sixth years. |
3. By accepting the waiver, the four licensees
would not be required to submit a performance bond of HK$60.124
million each on 22 October 2002. Their licence conditions will
be amended by mutual consent.
4. The decision to waive the submission of performance
bonds for one year is taken after considering very carefully
a request from the industry. The Government extends the same
waiver to all four licensees in order to maintain a level playing
field.
Office of the Telecommunications Authority
11 October 2002
Note: Instead of offering a performance bond, SUNDAY
3G offered an upfront payment of HK$250 million to the Government
to cover the SUF for the first five years. The Government accepted
this upfront payment and announced in a press release issued
on 22 October 2001 (see press release in ITBB's website http://www.info.gov.hk/citb/ctb/).
11 October 2002
The Telecommunications Authority
creates the
Class Licence for In-building Telecommunications
Systems to
Facilitate the Installation of Intelligent
Buildings The Telecommunications Authority (TA) issued
today (11 October 2002) the Class Licence for In-building Telecommunications
Systems (the Class Licence). This is the first class licence
created by the TA after the class licence system was introduced
into the telecommunications regulatory regime by the Telecommunication
(Amendment) Ordinance 2000.
The Office of the Telecommunications Authority
(OFTA) issued a consultation paper on 15 March 2002 to solicit
views from the industry and interested parties on the TA's proposal
to create the Class Licence. The consultation ended on 30 April
2002, with a total of 14 submissions received.
Having reviewed the submissions on his proposal,
the TA has finalised the details of the Class Licence. A Statement
issued by OFTA today explained the Class Licence which will take
effect as from 11 November 2002.
"In the Information Age, there is growing
demand for advanced, high speed telecommunications and broadcasting
services. The in-building system is an important component of
our telecommunications infrastructure through which consumers
gain access from their own premises to a variety of hi-tech and
innovative telecommunications and broadcasting services offered
in the market. The Class Licence will facilitate the development
of advanced in-building telecommunications systems and 'intelligent
buildings' in Hong Kong," a spokesperson from OFTA said.
In the consultation paper, the TA proposed that
only persons with property interests in the common parts of the
buildings in which the telecommunications systems were to be
installed would be qualified as class licensees to operate the
systems. The space of installation of cables and ancillary equipment
inside typical buildings in Hong Kong was limited. For most efficient
use of the in-building systems, the TA proposed that only property
owners would be licensed. This could avoid the proliferation
and uncoordinated installations of the in-building telecommunications
systems.
Taking note of the comments from the interested
parties, the TA recognises that in some developments where there
are no Incorporated Owners, the management of the buildings may
be entrusted to a building manager who has no property interest
in the buildings. For better administration of the Class Licence,
there is good reason to permit the building manager, who is specifically
authorised by the property owners to install in-building telecommunications
systems, to be the class licensee. The TA has therefore made
a minor amendment to his proposal to include such "building
managers" as class licensees.
"To be consistent with the intention to license
the property owners, the building manager will only qualify as
class licensee if it is specifically authorised by owners of
the building who own not less than 50% of the property interests
to install in-building telecommunications systems. However, its
qualification is subject to there being no other entity who is
already qualified under the eligibility criteria, such as the
Incorporated Owners. We believe that this would benefit the effective
implementation of the Class Licence and promote the installation
of in-building telecommunications systems," the spokesperson
explained.
"The Class Licence is a streamlined licensing
regime. Eligible persons will automatically be the class licensees
for the in-building telecommunications systems. Eligible persons
do not need to undergo a licence application and approval process
to become licensees. No licence fee will be levied on the class
licensees. We believe this is a convenient arrangement and minimises
the regulatory burden on licensees.
The class licensees may also engage a third party
as contractor to install and operate the in-building telecommunications
systems on their behalf. But the conditions and obligations of
a class licence cannot be delegated and will rest with the class
licensees themselves," the spokesperson continued.
"To ensure that residents and tenants in
the buildings will have unrestricted choice of different networks/services,
one important licence condition is that the in-building telecommunications
systems must be made available for interconnection with telecommunications
networks or operators on a non-discriminatory basis. Moreover,
authorised fixed telecommunications operators have statutory
right of access to buildings to install and operate networks
to reach the residents and tenants in the buildings, even though
there is already an in-building system installed by the property
owners," the spokesperson elaborated.
The Class Licence will be effective in a month's
time on 11 November 2002. "This will allow interested parties
including property developers, Incorporated Owners, Building
Managers, and contractors to make preparation. OFTA has also
set up two enquiry hotlines to help explain the new licence to
the public to smoothen the implementation process," the
spokesperson supplemented.
Background
After considering the merits of the development
of intelligent buildings, the government proposed a streamlined
licensing regime, that is, class licence, to regulate inter alia
the provision of in-building telecommunications services. The
proposal gained general support. The Legislative Council subsequently
enacted the Telecommunication (Amendment) Ordinance 2000 to provide
for the new class licence.
Having considered the submissions received, the
TA has now finalized the details of the implementation of the
Class Licence for In-building Telecommunications Systems. The
Class Licence will not affect in-building telecommunications
systems which are established and operated by the fixed telecommunications
network services or fixed carrier licensees, who will continue
to be regulated under the respective telecommunications licences
issued to the operators concerned. The Class Licence will offer
to the owners of the building an opportunity to establish and
operate their own separate in-building telecommunications systems
should they wish to.
OFTA has been explaining, and will continue to
explain, the creation of this Class Licence at its regular meetings
with individual Incorporated Owners and Building Managers.
To facilitate the prospective class licensees and relevant
parties for the implementation of the class licence,
OFTA has set up two enquiry hotlines at 2961 6709 and
2961 6298 to address public enquiries during office
hours. Apart from the TA Statement, the public may download
a layman brief for Incorporated Owners and Building
Managers from OFTA's website at www.ofta.gov.hk.
Office of the Telecommunications Authority
11 October 2002
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