SmarTone, Hutch 850/900MHz operations get OFTA flying start

4 Mar 2011

Hong Kong’s Office of the Telecommunications Authority (OFTA) announced yesterday that two domestic cellular operators have won a total of 20MHz of radio spectrum in the 850MHz and 900MHz bands, costing total spectrum utilisation fees (SUF) of HKD1.952 billion (USD251 million). Following an auction launched on 28 February and lasting four days, OFTA named the provisional successful bidders as SmarTone Mobile Communications (SmarTone-Vodafone) and Hutchison Telephone Company (3). SmarTone won ‘Band A’ (832.5MHz-837.5MHz paired with 877.5MHz-882.5MHz) for SUF of HKD875 million, while Hutchison is due to pay SUF of HKD1.077 billion for ‘Band B’ (885MHz-890MHz, 930MHz-935MHz). The pair outbid fellow Hong Kong cellcos China Mobile Hong Kong (Peoples), CSL and PCCW as well as local fibre network operator Hong Kong Broadband Network (HKBN). The regulator is also due to auction frequencies in the 2000MHz range, for which the same six companies have reportedly also applied.

Underlining the need for new wireless bandwidth allocations, an OFTA statement read: ‘Total mobile data usage has witnessed an explosive growth with a year-on-year increase of 189%, from 638TB in December 2009 to 1,847TB in December 2010. The assignment of the radio spectrum through the auction enables the successful bidders to… expand their existing networks with additional network capacity to meet the market demand.’

The winners will officially receive the new frequencies under 15-year unified carrier licences upon payment of the SUF and submission of a performance bond within 30 business days. Licensees will be required to provide coverage of 50% of Hong Kong’s population using the assigned band within five years of being granted a licence.