HK SmarTone Sees Support For Industry's 3G Auction Views
Dow Jones Newswires
HONG KONG -- With only a few days left for the Hong Kong telecom regulator to announce whether or not it is prepared to change its proposed 3G auction rules, the head of SmarTone Telecommunications Holdings Ltd. (H.SMR) said Thursday he has received no signals that the regulator will budge on any of the key points.
"But there is quite a lot of support from the (Legislative Council) bill sub-committee for the fifth-leaver rule," Ian Stone, chief executive officer of the Hong Kong mobile operator, told reporters at a 3G World Congress.
He was referring to the Office for Telecommunications Authority's (OFTA) plan to let the price for the third generation mobile licenses be determined by the price that the fourth last bidder to drop out of the auction is prepared to pay, even though the authority will ultimately issue four licenses.
Stone and most of his colleagues at Hong Kong's five other mobile operators, argue that the price should be fixed when the fifth last bidder drops out, thus leaving four bidders for four licenses.
On Tuesday, Hubert Ng, chief executive officer of one of the other operators, CSL Ltd. - the Hong Kong division of the mobile joint venture between Pacific Century CyberWorks (PCW) and Telstra Corp. (TLS) - said, however, that his company has received signals that OFTA is prepared to accommodate the industry's views.
SmarTone also wants an open auction, as opposed to the secret bidding process OFTA is proposing, where the bidders won't know either the identity of the other participants or how much they are offering, Stone said.
OFTA's Deputy Director-General for Telecommunications Au Man-ho said earlier this week that the regulator will announce next Monday whether it is prepared to change some of the controversial rules.
The Hong Kong legislative council is scheduled to vote on the proposed 3G auction regulations before its summer recess in July. The auction is planned for September.
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On a direct question, Stone said that full cooperation between 3G operators on a network infrastructure level may be difficult as competition issues will come into play.
"But the possibility of network sharing is there," he said, adding that such an arrangement could bring sizable cost savings. "I think 20% to 30% (reduction in capital expenditures) would be possible, depending on how much the radio network is," he said.
His comments follow a decision by the German telecom regulator to allow 3G operators to share network infrastructure as a means to cut costs, following high upfront payments for the German licenses.
According to the proposed license allocation framework in Hong Kong, each licensee is required to roll out its own network, an OFTA spokeswoman said.
"But if they want to share, we will consider it on a case by case basis for very exceptional cases," she said. Some places where network sharing could be considered would by tunnels, shopping malls or very remote areas.
-By Anette Jonsson, Dow Jones Newswires; 852-2802-7002; anette.jonsson@dowjones.com
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