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Hong Kong Mobile Sector Expected To Improve After Auction

December 15, 2014

The performance of some of Hong Kong's mobile network operators is due to improve in the coming financial year thanks to a recent public auction by the local government of a radio spectrum, the South China Morning Post reports.

The local subsidiaries of SmarTone Telecommunications, China Mobile and Hutchison Telecommunications were the biggest spenders during the bidding process at the auction; as winning bidders they will pay a combined amount of HK$2.42 billion in spectrum utilisation fees from 2016.

The Office of the Communications Authority (Ofca) said last week that 49.2 megahertz (MHz) of paired radio spectrum in the 1.9 to 2.2 gigahertz (GHz) band had been auctioned and sold. HKT is the largest telecommunications network operator for the city but did not take part in the auction, as it would have breached certain conditions of its US$2.43 billion acquisition of CSL New World Mobility. However, HKT did made 29.6MHz of its 3G mobile spectrum available in the auction, the article notes.

In November this year the Chinese government announced that it would be auctioning off 33.3% of the 3G spectrum held by the four incumbent 3G mobile network operators, whilst simultaneously giving said operators the right of first refusal to renew their 15-year licences for the remaining 66.7% of the spectrum that they hold at the moment. These 3G spectrum licenses expire in October of next year.

SmarTone purchased 19.8MHz of radio spectrum for HK$980.4 million; China Mobile hong Kong bought 19.6MHz of radio spectrum for HK$970.4 million; Hutchison Telecom bought 9.8MHz of radio spectrum for HK$470.4 million. They each have around 24 months to implement their new mobile infrastructures.

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