The Office of the Communications Authority ("OFCA") announced today (19 March 2013) that 4 existing mobile network operators have successfully bid for a total of 50 MHz of radio spectrum in the 2.5/2.6 GHz band at a total sum of spectrum utilization fees ("SUF") of HK$1.54 billion.
"Customer demand in the local mobile telecommunications market has continued to be buoyant, thanks to the launch of 4G service in 2011 that has greatly enhanced user experience in deploying high speed mobile broadband services. The assignment of the 50 MHz of radio spectrum through this auction will enable the successful bidders to deploy state of the art mobile broadband technologies and provide the necessary network capacities to further develop 4G service in Hong Kong," a spokesperson of OFCA said.
Four existing mobile network operators and one new entrant took part in the auction and competed equally with one another for the precious spectrum based on the same set of auction rules. Conducted on an Internet-based software platform, the auction commenced on 18 March 2013 and came to a satisfactory conclusion after a total of 18 bidding rounds on 19 March 2013. The provisional successful bidders, the radio spectrum under bidding and the SUF determined in the auction are tabulated below:
| Provisional Successful Bidders | Radio Spectrum Bid | SUF Payable (HK$ million) |
|
Genius Brand Limited |
Frequency Band A1 |
290 |
|
SmarTone Mobile Communications Limited |
Frequency Band A2 |
330 |
|
SmarTone Mobile Communications Limited |
Frequency Band A3 |
310 |
|
China Mobile Hong Kong Company Limited |
Frequency Band A4 |
300 |
|
CSL Limited |
Frequency Band A5 |
310 |
| Total | 50 MHz | 1,540 |
"This is the eighth auction that we have conducted since 2001. Auction is the economically effective method for assigning radio spectrum as a scarce public resource to the operators which value it the most and are able to put it to the most efficient use. While all the provisional successful bidders in this spectrum auction are existing mobile network operators, the fact that a new entrant has participated in the spectrum auction demonstrates that even though the mobile telecommunications market in Hong Kong is extremely competitive, it continues to attract new investments," the spokesperson of OFCA continued.
"The average SUF as determined by the auction today, at $30.8 million per MHz, is about 80% higher than that obtained in the auction of the same frequency band held in January 2009. This reflects the increasing value of radio spectrum as a scarce public resource, which is the major driving force behind the continual growth of our mobile broadband services. Despite the higher level of SUF, given the vibrant competition in our mobile market, we are confident that consumers will continue to enjoy quality mobile services with a wide range of choices at affordable prices," the spokesperson of OFCA added.
All provisional successful bidders are required to pay the SUF as specified in the table above, to submit a performance bond and to comply with other necessary regulatory requirements within 30 business days after the issue of the notice. The spectrum would be assigned to each successful bidder for a term of 15 years, until the year 2028.
Office of the Communications Authority
19 March 2013