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30 October 2001
Consultation Period Extended for
Implementation of Full Liberalization
of
Fixed Telecommunications Network
Services Market
from 1 January 2003
The Office of the Telecommunications Authority (OFTA) announced
today (30 October 2001) that the period to respond to the consultation
paper issued on 16 October 2001 on "Implementation of Full
Liberalization of the Local Fixed Telecommunications Network
Services Market from 1 January 2003" had been extended by
two weeks.
All submissions should be made to OFTA by 27 November 2001
instead of the original deadline of 13 November 2001 indicated
in the consultation paper.
"The extension was made in response to requests from
several operators in the industry who said that they need more
time to prepare comments on the paper," explained a spokesperson
of OFTA.
"This extension, however, is not expected to affect our
plan to accept applications for additional licences before the
end of 2001 and to issue the licences by early 2002," the
spokesperson said.
Office of the Telecommunications Authority
30 October 2001
Monday, 22 October 2001
TA Announces Completion of the Grant
Stage of the Auction for
3G Mobile Services Licensing and
Publishes Guidelines for
Application for Public Non-exclusive
Telecommunications Services (PNETS) Licences for Mobile Virtual
Network Operators (MVNOs) The Telecommunications Authority (the "TA") announced
that the Grant Stage of the Auction for the third generation
(3G) mobile services licensing had been completed today (22 October
2001), with the award of four licences to successful bidders
in the Auction. They are Hong Kong CSL Limited, Hutchison 3G
HK Limited, SmarTone 3G Limited and SUNDAY 3G (Hong Kong) Limited.
"All stages of the Auction for 3G Mobile Services Licensing
have now been successfully completed. The issue of 3G licences
will allow Hong Kong to enjoy 3G services at the same time as
other advanced economies. The licensees may now start to roll
out their networks and I believe Hong Kong is well positioned
to be a world centre for 3G innovation," said Mr Anthony
Wong, the Telecommunications Authority.
SUNDAY 3G did not provide a performance bond in time, but offered,
in lieu of the performance bond, an upfront cash payment of HK$250
million to cover the spectrum utilization fees for the first
five years after licensing.
"I have considered the special circumstances of SUNDAY
3G. I consider that it would be in the public interest to award
four licences promptly to ensure competition in the market. The
risk to the Government would actually be reduced with the upfront
payment in place of a performance bond and the Government will
earn additional interest. SUNDAY 3G's licence obligations in
all other respects, remain the same as those of the other 3G
operators," said Mr Wong.
"We also publish today the guidelines for the application
of Public Non-exclusive Telecommunications Service (PNETS) licences
for operating MVNO service. All interested parties can now apply
for the licences for MVNOs," Mr Wong added.
The guidelines for PNETS licences have been revised to include
the new MVNO licence. They give an overview of the regulatory
framework of MVNOs services under PNETS licence, set out the
licence conditions as well as the procedure of the licence application.
The document can be downloaded from the website of the Office
of the Telecommunications Authority (OFTA) - http://www.ofta.gov.hk.
In accordance with the regulatory framework of open network
access, the 3G licensees are required to open up at least 30
per cent of their capacity for use by non-affiliated MVNOs and/or
content and service providers. This requirement promotes entry,
ensures a competitive and vibrant 3G market and preserves a level
playing field for all operators to compete with.
"We are confident that with the transparent and balanced regulatory regime
for the operation of MVNOs, Hong Kong is well placed to reap the full benefits
of the new generation of mobile services. Consumers will enjoy more choices and
innovative services," Mr Wong explained.
As for the 2G licences, the TA also announced that an extension
of three years has been granted to the five existing 2G licences
operating in the 800/900MHz today. This brings the expiry dates
of their licences close to the other six 2G licences operating
in the 1.7 - 1.9 GHz bands in 2006.
"The extension of the 2G licences expiring between July
2002 to January 2003 is in line with our announced arrangement.
We will conduct an industry consultation around 2004/2005 on
future arrangements for the allocation of all the 2G licences
after their expiry," Mr Wong elaborated.
Office of the Telecommunications
Authority
Monday, 22 October 2001
16 October 2001
Consultation of the Implementation
of the Full Liberalization of
the Local Fixed Telecommunications
Network Services Market
from 1 January 2003
The Office of the Telecommunications Authority (OFTA) published
today (16 October 2001) a consultation paper "Implementation
of the Full Liberalization of the Local Fixed Telecommunications
Network Services Market from 1 January 2003" to invite comments
on the implementation issues of the licensing of additional local
fixed wireline-based networks for operation from 1 January 2003.
"We are committed to the progressive liberalization policy
for our telecommunications market. As announced in May 1999,
the moratorium on the issue of further local fixed network licences
for the construction and operation of new local fixed wireline-based
networks will end on 31 December 2002. To press on with our commitment,
we would invite new applications in 2001," said Mr Anthony
S K Wong, the Director-General of Telecommunications.
The Government's well established principle is that there would
be no pre-set limit of number of licences except for physical
constraints such as scarcity of spectrum. Accordingly, the Government
will not impose any pre-set limit on the number of licences for
the operation of additional fixed wireline-based networks. However,
applicants must submit evidence on their financial capabilities
to ensure that they will fulfill their submitted plans.
"In line with our transparent and fair regulatory regime,
we would like to seek input from the industry and interested
parties on the implementation issues before finalizing the rules
for invitation of applications by end this year," continued
Mr Anthony S K Wong.
In the consultation paper, the TA invites comments on the measures
to facilitate the roll-out of new local fixed wireline-based
network licensees as soon as practicable, the arrangement for
granting authorizations under section 14(1) of the Telecommunications
Ordinance to the new licensees for the access to space in buildings
and for road opening, and the arrangements for existing local
wireless fixed network and external facilities operators to operate
new local fixed wireline-based networks.
"With the licensing of additional local wireline-based
fixed telecommunications networks for operation from 1 January
2003, the local fixed telecommunications market will be fully
liberalized. This should attract more investment in network infrastructure,
which would in turn further strengthen Hong Kong's competitiveness
as a regional telecommunications and Internet hub. Consumers
will also benefit from increased choice of quality services at
reasonable prices," concluded Mr Anthony S K Wong.
The consultation will last four weeks until 13 November 2001.
Subject to finalization of the rules for inviting application
after considering views received from the consulted, the Government
will invite applications by end 2001 for licences for the operation
of additional fixed wireline-based networks from 1 January 2003.
The licences for the operation of additional fixed wireline-based
networks from 1 January 2003 will be issued as early as possible
in 2002, but will be effective only from 1 January 2003.
Details of the consultation paper can be viewed at OFTA's homepage
at http://www.ofta.gov.hk.
Background
The Government has adopted a progressive liberalization policy
in liberalizing the local fixed telecommunications market in
Hong Kong. After two rounds of extensive consultation in April
and September 1998, the Government announced its decision in
May 1999. The decisions are to, among others,
(a) issue licences for the operation of local wireless-based
local FTNS, and permitted the Hong Kong Cable Television Limited
to offer telecommunications services using cable modern technology
over its cable network subject to certain binding commitments.
Five local wireless-based FTNS licences and a FTNS licence were
issued in early 2000. Together with the four incumbent local
wireline-based FTNS operators, we now have a total of ten local
FTNS operators.
(b) to extend the moratorium on the issue of further local
FTNS licences for the construction of new local fixed wireline-based
networks to 31 December 2002, subject to satisfactory commitments
from the three existing new FTNS licensees (New T & T Hong
Kong Limited, Hutchison Global Crossing Limited and New World
Telephone Limited) on further network roll-out by end 2002. The
Government shall invite applications in advance for new licences
for the construction of competitive networks for operation from
1 January 2003.
To be consistent with the decision on the Moratorium, the
Government would require until 31 December 2002 that all external
facilities licensees shall use the circuits of local FTNS operators
for their backhaul, i.e. circuits linking their cable landing
points or satellite earth stations to the international gateways.
The decision to extend the moratorium is a well balanced decision
as the quickest way to provide effective competition to the then
Hong Kong Telecom. The three existing new FTNS licensees subsequently
provided commitments to roll out their network until end 2002,
which would enable 50% of the residential line customers to have
an alternative choice of local fixed telecommunications services
providers.
To implement the announced policy, the Government pledged in
2000 and 2001 Policy Addresses to invite applications by end
2001 for new local wireline-based FTNS licences for operation
from 1 January 2003. In line with the well established transparent
and fair regulatory regime, the Telecommunications Authority
invited inputs from the industry and interested parties on the
implementation details before invitation of applications.
Office of the Telecommunications
Authority
16 October 2001
12 October 2001
OFTA Issues Code of Practice for
Mobile Service Contracts
First of its Kind to Ensure Adoption
of Fair Trade Practices
The Telecommunications Authority (TA) today (12 October
2001) issued a Code of Practice for Mobile Service Contracts,
which is the first of its kind providing clear guidelines on
what constitute fair, balanced and reasonable service contracts
for both the consumers and the mobile service industry.
To take effect from 12 January 2002 (3 months
after the date of issue), all public mobile radiotelephone service
(PMRS) operators are required to conform to the principles set
out in the voluntary Code to ensure their adoption of fair trade
practices and adequate protections for the interests of consumers.
The Code specifies that the PMRS operators should
circumscribe in "fixed term contracts" the conditions
under which their unilateral alteration power (if any) can be
exercised. "Fixed term contracts" refer to those contracts
including provisions obligating regular fixed payment by the
consumers over an agreed period of time and pre-payment contracts
with rebate.
Under the Code, the provisions in contracts should
be balanced, fair and reasonable. Other guiding principles like
the language to be used, contrast factor, print size etc. have
all been covered. The Code requires that there should be clear
provisions, in a prominent place or highlighted, of the salient
points of the service contract. The Code also specifies the transitional
arrangement for existing contracts.
In accordance with the 'light-handed regulatory
approach', the Code as it stands is voluntary in nature. PMRS
operators who have the responsibility to maintain both the integrity
and goodwill of the industry should self-police the compliance
of this Code. It is hoped that the Code can over time serve as
a useful guidance for striking a balance between the legitimate
interest of the PMRS operators and that of the consumers and
raise the standard of services offered by the industry.
"The TA will continue to closely monitor
the market situation and will review further options, including
inserting special conditions in the licences or enacting new
legislation to regulate the business practice of the PMRS operators
in relation to the preparation of the service contracts, depending
on the effectiveness of the voluntary Code," the spokesman
said.
Full text of the Code of Practice is available
on OFTA's website: http://www.ofta.gov.hk under "What's
New" and "OFTA Documents - Code of Practice".
Office of the Telecommunications
Authority
12 October 2001
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