Internet, Telecom & Wireless

Internet Auction Will Decide Who Wins Radio Spectrum Bids In Hong Kong

Hong Kong's Office of the Telecommunications Authority has invited applications from existing mobile network operators to participate in the online auction of radio spectrum in the 1800 MHz band, which is scheduled to be held in June 2009.

"There has been significant growth of mobile telephony services in Hong Kong over the past years. As of January 2009, the number of mobile subscribers has reached 11.43 million. To cope with the need of additional radio spectrum for capacity expansion of public mobile service, the Government has decided to release 4.8 MHz x 2 of radio spectrum in the 1800 MHz band by way of auction," states an unnamed OFTA spokesperson in an official press release.

OFTA will auction the frequency bands using the simultaneous multiple round format with an Internet-based software platform. The auction rules and other elements in relation to the frequency assignment are set out in the Information Memorandum which can be downloaded from OFTA's website. OFTA will accept bidding applications on May 21-22, 2009.

The available spectrum will be divided into six frequency bands, each with a bandwidth of 0.8 MHz x 2. Existing mobile network operators may bid for one to all six frequency bands. The use of the frequency bands will be subject to payment of spectrum utilization fee, which is composed of an upfront fee and an annual fee. The minimum amount of the upfront fee is HKD60,000 for each frequency band and the actual amount will be determined in the auction. The annual fee will be pitched at the same level currently applied to public mobile service using the 1800MHz band.

The available radio spectrum is not sufficient for a new entrant to build a network that can compete effectively with the existing mobile network operators in terms of system capacity, coverage or quality of service. Therefore, the Telecommunications Authority has decided to only assign the radio spectrum to the existing mobile network operators.

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