Unicom mulls HK licence bid

27 May 2004

China Unicom has expressed an interest in becoming the newest wireless operator in Hong Kong and is mulling over a bid for a licence which would allow it to launch a CDMA2000 network in the Special Autonomous Region. If successful, the new concession would allow Unicom, which operates both CDMA and GSM networks in the People’s Republic, to benefit from lucrative roaming revenue from its Chinese subscribers. Such revenues are estimated to account for between 10% and 20% of the territory’s mobile operators’ revenues. Moreover, the licence would allow Unicom to target Hong Kong’s populace with a host of advanced services not yet seen in the territory, such as CDMA2000 1X data services. Since the launch of its 1X service in China last year Unicom claims to have added three million users. Interest is expected to be piqued further with the imminent launch of a dual-mode phone, which will allow users to switch between CDMA and GSM networks.

Back in March 2004 the Hong Kong telecoms regulator – the Office of the Telecommunications Authority (Ofta) – announced proposals to issue a new wireless licence from the vacated spectrum of two existing wireless concessions, when the licences expire in July and November 2005. According to Ofta the spectrum used by the two existing licensees – which currently operate CDMA and TDMA-based networks – could be more efficiently used under a single concession. Ofta hopes the vacated spectrum will be taken up by a CDMA2000-based operator, such as Unicom, as Hong Kong does not currently have a wireless provider using this technology. Ofta proposes that the new licence be awarded in a similar manner to the country’s 3G concessions (ie. via a hybrid pre-qualification process and a subsequent auction). Two of Hong Kong’s 3G licensees – Telstra’s CSL and Sunday Communications – immediately poured scorn on the government’s proposal. Hubert Ng, CSL’s chief executive, said that Ofta should reconsider whether there were already too many licensees for the market; at the end of 2003 the wireless penetration rate of Hong Kong was a massive 106.3%. Hutchison is the market leader with 1.83 million customers, followed by People’s Telephone (1.26 million), New World Mobility (1.19 million), Telstra CSL (1.15 million), SmarTone (1.04 million) and Sunday Communications (750,000).

China, China Unicom
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