OFCA's Response to HKT's Open Criticisms Concerning Spectrum Management, Assignment and Supply

Regarding the reckless and unreasonable criticisms and allegations made repeatedly by HKT (Hong Kong Telecommunications (HKT) Limited) today (10 January 2017) and in the recent months against the Communications Authority ("CA") on matters relating to the management, assignment and supply of the radio frequency spectrum, the Office of the Communications Authority ("OFCA") has the following response:

Frequency spectrum is an extremely scarce public resource in Hong Kong and is by no means unlimited.  In order to use the limited spectrum efficiently, it is necessary to begin with efficient management and assignment of frequency spectrum.

The CA has all along been adopting a market-based approach in the management and assignment of frequency spectrum with competing demands.  This is to ensure that only those operators which attach utmost importance to the value of the relevant spectrum will be assigned the concerned spectrum through means such as auction, and that they will utilise this scarce resource in the most effective manner.

There is currently a total of 552 MHz radio frequency spectrum that has market demands and can be used to provide mobile telecommunications services ("mobile services") in Hong Kong, all of which has been assigned to four mobile network operators ("MNOs") for the provision of second generation ("2G"), third generation ("3G") and fourth generation ("4G") mobile services.  Their respective distributions are as follows: HKT with 194 MHz (accounting for 35% of the total spectrum assignment), Hutchison Telephone Company Limited with 129.4 MHz (23%), China Mobile Hong Kong Company Limited with 116 MHz (21%) and SmarTone Mobile Communications Limited with 112.6 MHz (20%).

HKT's allegation that the Government artificially withholds spectrum from the market is disregard of the above facts and bewildering.

In fact on the contrary, there is currently about 35 MHz of spectrum (including about 5 MHz of spectrum in the 1900 - 1904.9 MHz band and 29.7 MHz of spectrum in the 1.9 - 2.2 GHz band respectively) which is still available for mobile services but without any party expressing interest in it.  If HKT and other operators are interested in this spectrum, they may make applications to OFCA at any time.  OFCA will make available the spectrum concerned to the market in accordance with the established mechanism.

As to the spectrum for fifth generation ("5G") mobile services, according to the timetable of the International Telecommunication Union (ITU), it intends to discuss the allocation of frequency bands between 24.25 to 86 GHz for 5G services with the Member States at the World Radiocommunication Conference to be held in 2019.  OFCA has been following up the work in connection with ITU closely, and will continue to do so as well as participate in the relevant conferences. We will also closely monitor the developments of concerned regional organisations and advanced economies. Currently, only a small portion of spectrum in the frequency bands between 24.25 to 86 GHz have been assigned to existing services in Hong Kong, while a majority of the frequency bands have still been left vacant. After the harmonisation of the spectrum plan at the international and regional levels, the CA can immediately allocate the applicable portions for 5G services.

In the meantime, OFCA will also provide assistance to those companies wishing to have the 5G technology tested locally.  For instance, the CA has issued permit(s) in 2016 for telecommunications equipment supplier(s) to test the 5G technology using spectrum in the 15 GHz band in Hong Kong.

HKT suggested that some frequency bands currently designated for other wireless communications or broadcasting services be re-allocated for mobile services.  In this connection, we must point out that the scarce radio spectrum should be appropriately allocated for different types of services to cater for the needs of various sectors in the community.  In considering allocating more spectrum for a particular type of communications service (e.g. the mobile communications service), the CA should also take into account its impact on other types of communications services.  On the 3.4 - 3.6 GHz band currently allocated for the satellite services, the band is widely used for the purpose of satellite television reception.   At present, there are some 1600 Satellite Master Antenna Television (SMATV) systems for residential use and they are connected to some 900 000 residential premises.  As such, should the 3.4 - 3.6 GHz band be released for the mobile services, we must first tackle the problem of technical compatibility between the mobile services and the satellite services to avoid any impact on the existing services.

HKT has previously indicated to OFCA its interest in conducting a mobile service technical trial for the 3.4 - 3.6 GHz band in order to examine the potential impact on the existing satellite services.  If HKT confirms implementing the said trial, OFCA is ready to provide assistance as appropriate.

Currently, the 700 MHz band is being used for the provision of analogue television services.  OFCA plans to allocate the concerned spectrum for mobile services after the switch-off of the analogue television services and upon completion of frequency coordination with the Mainland regulatory bodies. As to the timeframe, the Government has presently set the year of 2020 as the working target for the switch-off of the analogue television services, with a review in 2017-18.

Under the technology-neutral approach the CA adopts to manage radio spectrum, operators are free to refarm the spectrum already assigned to them to provide higher generation of mobile services to cater for the demands of mobile services users without the need of obtaining prior approval from the CA.  Indeed, operators have out of their commercial considerations made some refarm of the spectrum held by them to provide 3G and 4G services.  They are at liberty to conduct similar spectrum refarm for early launch of 5G services in Hong Kong.

Office of the Communications Authority

10 January 2017