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Hong Kong awards latest LTE spectrum, raising $198.4m

Four existing cellcos win the new licences while the only new entrant bidder, China Unicom, misses out


Published: 20 March, 2013

READ MORE: Spectrum | Hong Kong | Regulator | LTE

Four Hong Kong operators have paid a total of HK$1.54bn ($198.4m) for 50MHz of 2.5/2.6GHz spectrum, but the government faces criticism over its plans to take back some of the country's 3G frequencies.

For the new LTE licences, four existing cellcos were successful and the only new bidder, China Unicom, missed out. Genius Brand - a joint venture between Hutchison and PCCW's HKT - bid HK$290m for just 2x5MHz, while CSL offered HK$310m for the same amount.

SmarTone bought two paired 5MHz blocks for HK$640 and China Mobile Hong Kong bid HK$300m for a single block. The latter runs both TDD and FDD LTE services and already holds 2.3GHz TDD capacity. SmarTone had missed out in a previous 4G auction and had been relying on refarmed 1.8GHz frequencies to roll out LTE, but now has virgin, high capacity spectrum.

CSL now owns four adjacent 10MHz blocks of LTE spectrum, and when combined with its refarmed 1.8GHz, it has the highest amount of FDD LTE spectrum among any Hong Kong carrier.

Although the only new entrant did not succeed, regulator OFCA insisted its participation was still a positive sign, saying this "demonstrates that even though the mobile telecommunications market in Hong Kong is extremely competitive, it continues to attract new investments". The average price of HK$30.8m per MHz is 80% higher than the level in the first auction in this band, in 2009.

However, Hutchison Telecom has accused OFCA of "robbing" both consumers and operators with its plan to take back, and re-auction, one-third of the 3G spectrum currently in use. CEO Peter Wong said the proposal is "unfair and unnecessary" and it would not improve competition, but would instead cause service disruptions and higher charges.

"We're not afraid of competition. We've been operating our business in a highly fierce market for more than a decade," he said. "We've been invested a lot of money in telecom infrastructure and helping consolidated Hong Kong's position as a telecoms hub in Asia and providing consumers with high-quality telecom services at the world's cheapest prices."

SmarTone has said a re-auction would increase network costs by as much as 40%, leading to higher charges for customers. The existing 3G licences expire in 2016 and the government will make a final decision after its public consultation ends on April 11.

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