Press Release issued by the Commerce, Industry and Technology Bureau (CITB) on 29 November 2004
New Licences for Existing 2G Mobile Services to be Granted
Holders of the nine incumbent GSM and PCS licences providing
second-generation mobile services will be given new Mobile Carrier Licences
for a period of 15 years to continue their mobile telecommunication services.
No new licence will be granted to the existing two licensees
operating the CDMA and TDMA networks because the assigned spectrum has
not been used efficiently. The licensees, however, may continue to operate
the services for three more years, with one-third of the originally assigned
spectrum, to facilitate customers migration.
The Government will also launch a spectrum policy review
in 2005. Before the review and the subsequent legislative and administrative
arrangements are completed, the spectrum vacated by the CDMA licence will
not be released for any new mobile licence.
Announcing the decisions today (November 29), the Director-General
of Telecommunications, Mr M H Au, said that radio spectrum was a scarce
and valuable public resource and the Government had the responsibility
to ensure its efficient utilization.
He said, "For the GSM and PCS licensees, the Government
considers that they have made efficient use of the radio spectrum assigned
to them in the past years and provided satisfactory service with continuous
investments and improvements. In order to provide a stable investment
environment and ensure continuity of service to their subscribers, the
licensees will be offered new mobile carrier licences with a validity
period of 15 years."
For the CDMA and TDMA networks, Mr Au pointed out that
the number of subscribers had declined very substantially over the past
few years, to 25,687 and 30,590 subscribers respectively, compared to
some one million subscribers for a typical PCS network.
He said, "It is evident that these two networks have
not been making efficient use of the assigned spectrum. In addition, the
technologies being deployed by both networks are becoming obsolete.
We do not consider it in the public interest to give
these licensees new mobile carrier licences for 15 years, as extending
the tenure of their use of spectrum will be at the expense of the opportunity
of using the same spectrum by services that can generate higher economic
benefits to the community."
To safeguard the interest of existing subscribers to
these two networks, the Government decided that the licensees of these
two networks would be given a period of three years upon the expiry of
their existing licences so that they could gradually migrate their customers
to other networks. Taking into account the existing and anticipated traffic
on those networks, less spectrum would be assigned for this migration
period.
The Permanent Secretary for Commerce, Industry and Technology
(Communications and Technology), Mr Francis Ho, elaborated on the Government
decision to conduct a spectrum review in 2005.
He said that the current spectrum policy was first developed
in the 1970's and was largely based on an administrative system for allocation
and assignment of radio spectrum. The policy has served Hong Kong well
for the past three decades.
"Given the rapid pace of advancement in technology development
and deployment, we consider that a fundamental review of the policy for
allocation and assignment of radio spectrum is warranted.
The objective of the review is to formulate a responsive,
transparent and market-led spectrum policy to enable the community to
reap the maximum benefit from the deployment of this scarce public resource
as technology advances.
"After the completion of the review and the consequential
legislative and regulatory arrangements, the Government may, taking into
account the outcome of the review, initiate the necessary arrangements
for allocating the spectrum vacated by the CDMA system in 800 MHz band
for new licences," Mr Ho said.
The GSM and PCS licensees will be required to pay spectrum
utilization fee for the new licences, which is set in broad consistency
with that for the 3G licensees. For the first five years of the new licence,
a fee of HK$145,000 per MHz of spectrum per year will be charged. From the
sixth licence year onwards, the fee will be set at 5 per cent royalty
over the annual network turnover of the licensee, subject to a minimum
fee of HK$1.45 million per MHz of spectrum per year.
There are 11 licences for second-generation mobile services,
which will expire between July 2005 and September 2006. The Office of
the Telecommunications Authority had launched two rounds of public consultation
exercises, in August 2003 and March 2004, on the licensing arrangements
for mobile services upon the expiry of those licences.
Ends/Monday, November 29, 2004 |
