Smartone asks HK Gov to rewrite 3G auction rules

date: June 14, 2001

Hong Kong wireless operator Smartone on Thursday at the 3G World Conference called on the government to reconsider rules on 3G auction due later this year, and warned that excessive royalties could harm local operators.

Although six operators were expected to compete for the four licenses on offer, the government's decision that it would stop the auction when it had received three bids was wrong "and we feel it should be stopped when four bidders are left and indirectly drive up prices" said Ian, Stone Smartone chief executive.

Stone also slammed the decision to use a "blind auction" whereby bids would remain undisclosed and the process "would introduce complexities which we think would make this fail," he said.

He urged the government to "take care with how we go forward" and specifically to "take care with the size of the royalty, as we have seen in the rest of the world it can be devastating."

In February, the government said it would issue four 3G licenses by mid-year, with a pre-qualification exercise followed by a spectrum auction.

Under the spectrum auction, operators would also have to make royalty payments to the government based on a percentage of their revenue.

Stone said the move to 3G would not happen "unless we get customers to take interaction beyond pure voice services." And added the move from 2G to 3G would also require a rise in average revenue per user (ARPU) to fund the change.

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