Hong Kong’s Office of the Communications Authority (OFCA) on 21 December 2012 published an invitation to participate in the auction of 50MHz of radio spectrum in the 2.5GHz/2.6GHz band for the provision of wireless broadband services, including Long Term Evolution (LTE). OFCA said in a statement: ‘The monthly mobile data usage in Hong Kong surged to 6,347 terabytes in September 2012, which is about twice and more than four times of the mobile data usage volume recorded during the same period in 2011 and 2010 respectively. Following the release of 90MHz of radio spectrum in the 2.5GHz/2.6GHz band in 2009 [which operators utilised for 4G services], the Communications Authority (CA) will make available an additional 50MHz of radio spectrum in the same frequency band to meet the industry’s demand for additional radio spectrum for further development of the fourth generation mobile services.’
The spectrum available in the upcoming auction is divided into five 2×5MHz frequency bands. New entrants to the mobile market and incumbent operators may participate, and may bid for one to all of the five bands. The government has set the reserve price at HKD150 million (USD19.4 million) for each frequency band. The actual spectrum utilisation fee (SUF) payable will be determined by the auction exercise, to be conducted sometime in March 2013.
The frequency bands will be assigned to the successful bidder(s) under unified carrier licences to be granted by the CA with a validity period of 15 years. The successful bidder(s) will be required to provide within five years from the grant of the licence mobile services coverage to a minimum of 50% of the Hong Kong population or fixed services coverage to at least 200 commercial and/or residential buildings in Hong Kong.
The Information Memorandum can be downloaded from OFCA’s website at http://www.ofca.gov.hk/filemanager/ofca/en/content_810/20121221_IM.pdf. OFCA will accept bidding applications on 21 and 22 February 2013.