TRADING FUND REPORT 2023/24
While Hong Kong was in the gradual process of economic recovery, the growth of the communications market continued to be robust in 2023/24. OFCA’s dedication to facilitating the development of the communications sectors together with industry’s enthusiasm for enhancing the quality of their communications services are expected to shape a more vibrant communications market which better serves the community and businesses in Hong Kong.
Mr Chaucer LEUNG, JP
Director-General of Communications
I am pleased to present the Trading Fund annual report 2023/24 prepared by the Office of the Communications Authority (OFCA). Apart from giving an overview of the status of the communications markets in Hong Kong, this year’s report is rich in content which highlights the major work accomplished by OFCA in the past year, and our endeavours to facilitate further developments of the communications sector in Hong Kong.
In the past year, the communications sector continued to thrive and show its resilience in coping with various challenges when the economy was in the course of progressive recovery from the global pandemic.
Hong Kong has 25.3 million mobile service subscriptions, which represents a penetration rate of 328% of the population which is among the highest in the world. The substantial increase in mobile data usage also reflects the continuous growth of Hong Kong’s mobile service market despite economic challenges. In March 2024, 217 616 Terabytes of mobile data or 29 Gigabytes per capita were consumed. These figures represent a year-on-year increase of almost 30%.
Over the past year, local mobile network operators (MNOs) have been actively expanding the fifth generation (5G) networks. With an extensive 5G service covering all populated districts, bustling shopping centres and mass transit railway stations, 6.9 million of 5G service subscribers, representing 92% of the population, enjoy high-speed 5G services in their daily life. The high penetration rate also unleashes the enormous potential of 5G technology which supports a great variety of innovative applications and brings about new business opportunities to various sectors in Hong Kong.
It is also encouraging to share that the household penetration rate of Hong Kong’s fixed-broadband network stands at over 97%, among which 85% of these households are enjoying high-speed broadband services via optical fibre. Being the mainstay fixed network access technology in Hong Kong, optical fibre enables quick and reliable access to various state-of-the-art communications services and applications by both business and personal users.
There was a steady growth of Hong Kong’s broadcasting market in 2023/24. The public was able to enjoy more than 700 local and overseas television programme channels in various languages through free-to-air, pay and satellite television services alongside 14 local radio programme channels. With our advantageous geographic location and well-developed communications infrastructure, Hong Kong is a prime location for regional satellite uplinks with nine non-domestic licensees delivering approximately 150 satellite television programme channels throughout the Asia-Pacific region. With the Government’s adoption of the Open Sky Policy, local public is able to enjoy the reception of around 500 free satellite television programme channels in Hong Kong.
Some of the major works undertaken by OFCA in the year of 2023/24 are highlighted in the ensuing paragraphs:
Further to the assignments of a total of 530 MHz of spectrum below 6 GHz for provision of 5G services between 2019 and 2021, there will be another round of spectrum provision totalling 510 MHz of spectrum through market mechanism, i.e. auctions in 2024. Among these spectrum, the Communications Authority (CA) decided in May 2023 and March 2024 respectively to re-assign 110 MHz of spectrum in the 850/900 MHz and 2.3 GHz bands and allocate 400 MHz of spectrum in the 6/7 GHz band for public mobile services after relocation of the existing users of fixed and outside broadcasting links to other frequency bands. The spectrum in the 6/7 GHz band may also be suitable for sixth generation (6G) deployment, making Hong Kong a first mover in releasing relevant frequency band for 6G development. In addition, OFCA administratively assigned another 1 200 MHz of spectrum in the 26/28 GHz band to MNOs for provision of 5G or more advanced mobile services in August 2024, together with 1 200 MHz of spectrum in the bands administratively assigned for the provision of large scale public mobile services in April 2019, and 400 MHz of spectrum in the bands currently available for administrative assignment on a shared basis, making up to a total of 2 800 MHz of millimetre-wave spectrum released to the market. In parallel, we have been closely monitoring the development trends in both global and regional telecommunications and spectrum planning initiatives. Among others, we participated in the World Radiocommunication Conference of the International Telecommunication Union (ITU) held in late 2023 and followed up with allocation of identified frequency bands for use by various radiocommunications services in Hong Kong.
To support MNOs in expanding their 5G networks, OFCA has been facilitating the installation of radio base stations (RBSs) by MNOs at suitable government premises and public facilities such as public pay phone kiosks, sheltered bus stops and smart lampposts. In the 2022 Policy Address, the Chief Executive announced that the Government would amend the legislation and relevant guidelines to ensure appropriate available space in new buildings for installation of mobile communications facilities. In this regard, OFCA worked closely with the Commerce and Economic Development Bureau (CEDB) in introducing the Telecommunications (Amendment) Bill 2023 to the Legislative Council (LegCo) in December 2023.
OFCA staff members conducting an on-site visit to the radio base stations installed in the vicinity of a village together with the representatives from another government department, mobile network operators and the village.
The Telecommunications (Amendment) Ordinance 2024 was passed by LegCo on 21 February 2024, enabling CA to grant authorisation for MNOs to gain free access to reserved space in specified buildings (including new and redeveloped commercial, industrial, residential and hotel buildings) for installation and maintenance of mobile communications facilities. The relevant amendment took effect on 1 October 2024. Specified buildings with building plans approved on or after 1 April 2025 will be required to follow the new requirements. New government buildings and public housing will also follow the arrangement for installing mobile communications facilities. The arrangement will help further expand the mobile network coverage and capacity in Hong Kong.
The Chief Executive further announced various initiatives in the 2023 Policy Address to promote 5G development. First, to enhance 5G network capacity at major public event venues, OFCA is proactively coordinating with relevant MNOs, relevant venue managers and government departments to streamline the approval and installation procedures to facilitate prompt installation of 5G RBSs by MNOs at these venues, including Central Harbourfront Event Space, Hong Kong Coliseum, Hong Kong Convention and Exhibition Centre, AsiaWorld‑Expo, Victoria Park and Kai Tak Sports Park. Such installations could enhance their 5G network capacity and ensure smoother communications services for mobile users attending major public events at these venues.
OFCA staff members carrying out a mobile coverage measurement at Kai Tak Sports Park.
Second, the Government will supply more spectrum to MNOs by auctions, with a view to improving the transmission speed of 5G networks. In this regard, OFCA will conduct two auctions in November 2024 for the 850/900 MHz, 2.3 GHz and the newly launched 6/7 GHz bands in 2024, providing a total of 510 MHz of spectrum for public mobile communications services. MNOs who acquire the spectrum in these bands will benefit from the Inland Revenue (Amendment) (Tax Deductions for Spectrum Utilization Fees) Ordinance 2024 which took effect in January 2024, allowing full tax deductions for the relevant spectrum utilization fees. The tax incentive concerned is a 2023-24 Budget initiative, aiming to encourage MNOs to invest in mobile communications services through bidding for these radio spectrum.
Third, to improve network coverage in remote and rural areas, the 2023 Policy Address announced that the Government will expedite the expansion of mobile network infrastructure in rural and remote areas through subsidies, with a view to enhancing the mobile network coverage and capacity in these areas so as to improve the quality of life of the residents and safeguard the safety of visitors. To take forward the initiative, OFCA is now liaising with MNOs on the technical issues in connection with the mobile network and the setting up of RBSs in rural and remote areas. Moreover, OFCA has been implementing the Subsidy Scheme to Extend Fibre-based Networks to Villages in Remote Areas since 2019. With a total funding amount of HK$770 million, the subsidy scheme offers financial incentives for fixed network operators (FNOs) to extend their fibre-based networks to a total of 235 remote villages. Upon the award of all six tender projects under the subsidy scheme between November 2019 and May 2020, the selected FNOs have extended their fibre-based networks to 200 villages so far. One of the most notable achievements was the completion of the installation of three submarine fibre cables to Lamma Island, Cheung Chau and Peng Chau in May 2023. In the coming year, OFCA will continue to monitor the implementation progress, with a view to ensuring that relevant works for all villages under the subsidy scheme will be completed by 2026.
The Real-name Registration Programme for Subscriber Identification Module (SIM) Cards (RNR Programme) was fully implemented in February 2023. The RNR Programme requires that all SIM cards issued and used locally (including SIM service plans and pre-paid SIM cards) must have completed real-name registration before service activation. To further enhance the registration platforms, telecommunications service providers have adopted “iAM Smart” as the default registration method for Hong Kong identity card holders in completing real-name registration of pre-paid SIM cards starting from 1 October 2024. OFCA will work continuously with relevant telecommunications service providers to ensure effective implementation of the RNR Programme through regular reviews, market surveillance and public education.
To tackle phone scams, OFCA has been working closely with the Police and telecommunications service providers to devise and implement technical measures as well as coordinate publicity efforts. In 2023/24, a series of measures were successfully implemented by the telecommunications industry. They include blocking suspicious +852 calls incoming from outside Hong Kong, sending voice or text alerts to mobile service users before receiving +852 calls incoming from outside Hong Kong, and suspending services for local telephone numbers when suspicious call patterns from these numbers are detected, etc. As of end August 2024, telecommunications service providers have blocked more than 4.2 million suspicious calls starting with “+852” and suspended the services for about 1.13 million local telephone numbers, while mobile service providers have issued more than 26.5 million voice or text alerts.
Telecommunications service providers have adopted “iAM Smart” as the default registration method for Hong Kong identity card holders in completing real-name registration of pre-paid SIM cards starting from 1 October 2024.
On the other hand, OFCA introduced the Sender Registration Scheme for Short Message Service (SMS) to help members of the public verify the identities of SMS senders. Under the scheme, all “Registered Senders” have to use their “Registered SMS Sender IDs” with the prefix “#” to send SMS messages to local subscribers of mobile services. The scheme has been implemented since 28 December 2023, and was open to all sectors for application starting from February 2024. As of end August 2024, more than 320 organisations have joined the scheme, including telecommunications service providers, banks and 63 government departments and statutory bodies which need to communicate with members of the public via SMS messages (including the Immigration Department, the Department of Health, the Hong Kong Police Force, the Customs and Excise Department, the Consumer Council and the Mandatory Provident Fund Schemes Authority). We will continue to encourage active participation of companies and organisations to join the scheme, with a view to enhancing the security and credibility of SMS messages and providing better protection to members of the public.
During the year, OFCA assisted CA in revising the Television and Radio Codes of Practice on Programme and Advertising Standards (CoPs). The amendments took into account the views received from the public and the industry, along with the more challenging business environment faced by the broadcasters. In a bid to reduce compliance costs and to facilitate new revenue streams, the revision included relaxation of sponsorship and indirect advertising regulation for television and radio. The requirement for broadcasters to safeguard national security was also included in the revised CoPs and took effect since December 2023.
A staff member of OFCA using the signal monitoring system to measure the digital terrestrial television signals emitted by broadcasters to ensure their compliance of relevant technical standards.
Following an internal design competition, the mascot of OFCA, “CommBo”, was officially launched in March 2024. Acting as OFCA’s spokesperson and ambassador, it shares information about CA and OFCA with the public in a friendly and approachable way. Going forward, CommBo will deliver different messages in relation to the smart use of communications services through various publicity channels.
The Director-General of Communications, Mr Chaucer Leung, officiated the launching ceremony of "CommBo", the mascot of OFCA, at the “Use Communications Services Smartly. Stay Vigilant against Telephone Scams” roving exhibition in March 2024.
On the broadcasting front, OFCA is conducting a public opinion survey regarding broadcasting services which is expected to be completed by the end of 2024. This survey aims to track the public’s evolving viewing and listening habits. The results will serve as a reference for CA to handle the licence renewal applications from major broadcasting licensees in the coming years.
On the telecommunications front, in addition to the two spectrum auctions to be conducted in November 2024, as the existing assignments of 50 MHz of spectrum in the 2.5/2.6 GHz band are due to expire in May 2028, OFCA will assist CA in conducting a re-assignment exercise for the 2.5/2.6 GHz band. A public consultation was launched in September 2024 to solicit views from interested parties regarding the proposed reassignment arrangements.
For the 2023 Policy Address initiative on enhancing 5G coverage in rural and remote areas, OFCA has already kicked off the relevant preparatory work for implementation of a subsidy scheme and is seeking comments from stakeholders before ironing out the technical details of the scheme. Our target is to launch the scheme in 2025 after acquiring the necessary funding from LegCo.
Combating fraudulent calls and messages transmitted via telecommunications networks is an ongoing battle for OFCA. Apart from overseeing the effective implementation of the RNR Programme and the SMS Sender Registration Scheme, we will continue to work with the Police and the telecommunications industry as well as to exchange experiences with regulators in other jurisdictions, for enhancing existing measures and introducing new measures to better protect telecommunications service users from deception.
In summary, 2023/24 is a challenging yet fruitful year for OFCA. Accomplishment of all the planned tasks are attributable to the dedication, team spirit and “can-do” attitude exhibited by OFCA colleagues. I would also like to take this opportunity to acknowledge the invaluable guidance of the Chairman and Members of CA as well as the unwavering support furnished by our licensees as we strove to exceed expectations in our regulatory duties. Looking ahead, OFCA will continue to support CA and collaborate with the communications industry with a view to cultivating an incessantly vibrant communications market to the interest of the general public and strengthening Hong Kong’s position as the communications hub in the region.
