Hong Kong closes 3G licence bids

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Hong Kong closes 3G licence bids

Hong Kong's Office of the Telecommunication Authority (OFTA) will close applications for its 3G (third-generation) mobile licences on 18 September. An auction for the four available licences may begin as early as the following morning, an OFTA official said.

Whether or not an auction takes place depending on the number of bidders, according to Diana Fu, an OFTA spokeswoman. "If there are four or less bids, there will not be an auction, but if there are more, an auction will take place," she said.

Amid the bear-like economic climate in Asia and the rest of the world, industry analysts are not expecting an overwhelming response from telecommunication operators.

"I would expect the bidding price to be very low, especially with what happened [in the US] last week. Everyone is cautious with what the future may hold," said Bertrand Bidaud, Gartner's Asia-Pacific director of telecommunication research.

Bidaud said that Singapore did not have enough bidders when four of its 3G licences were offered up in April this year. "There are more telecom incumbents in Hong Kong than in Singapore, so there will probably be enough bidders in Hong Kong, although I would be surprised if there are too many more," he said.

According to the South China Morning Post, Hong Kong's top three telecom players, Hutchison Telecom (Hong Kong), Hong Kong CSL and SmarTone Telecommunications Holdings, are expected to bid for the 3G licences.

Smaller mobile operators are likely to refrain from bidding, either due to shareholder conflict or business incapacity, the report said.

International players are also not expected to participate in Hong Kong's 3G bids, Gartner's Bidaud said. "Although the prices of licences are much lower in Asia-Pacific than in Europe, it is unlikely that European operators will place any bids," he said, adding that uncertain economic times and mounting debts plague many European carriers.

Operators looking to bid for the licences are required to pay a minimum flat payment of HK$50m (£4.36m) per year for the first five years, and a minimum of 5% of their 3G revenue until the 15-year licence expires, an OFTA information memorandum stated.

Further information:
http://www.ofta.gov.hk

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