Law & Policy, Telecom & Wireless

Hong Kong's Fixed-Mobile Interconnection Charges Now De-regulated

Hong Kong's Office of the Telecommunications Authority has issued a statement that the regulatory guidance on fixed-mobile interconnection charge in favor of the mobile party's network pay model will be withdrawn as planned today when the two-year transition period ends.

The interconnection charge for fixed-mobile interconnection will thereafter be settled among fixed and mobile operators by commercial agreements without any ex ante regulatory intervention.

"The Telecommunications Authority is pleased to see that in order that they may operate in the market with business and regulatory certainty, a number of major players have reached commercial agreements or understanding for the post transition period. This commercial outcome without regulatory intervention is commendable, and it demonstrates that a market solution for FMIC is indeed feasible and achievable," the statement said.

Prior to April 27, 2009, FMIC has been subject to a regulatory guidance in favor of the MPNP approach. That is to say, the interconnection charge was paid by a mobile network operator to the interconnecting fixed network operator or telephony traffic both from a fixed line to a mobile phone, and from a mobile phone to a fixed line.

After carrying out an extensive regulatory review and public consultation exercise involving all industry stakeholders, OFTA announced on April 27, 2007, the decision to withdraw that regulatory guidance, subject to a transitional period of two years which was intended to enable mobile network operators and fixed network operators to negotiate new FMIC arrangements. The de-regulation of FMIC was consistent with the market-driven policy adopted by the government in Hong Kong and removed regulatory asymmetry which was not conducive to the development of fixed-mobile convergence.

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