Expect to see 3G alliances in the future

date: May 15, 2001

Craig Ehrlich, Managing Director of Sunday Communications HK, believes the introduction of 3G services in Hong Kong will see alliances and mergers between operators, as players without a license cannot move on.

Ehrlich at the CLSA Investors Forum said, "3G will cause a serious consolidation,"

Hong Kong plans to auction four 3G licenses and the winners will have to open 30% of their capacity to mobile virtual network operators (MVNOs).

Ehrlich does not expect massive profits from 3G services, but if you are without a 3G license, you will not have the latest technology for your consumers.

If you don't win a 3G license, you will just exit" Ehrlich said.

Even if you are one of the winners, you will find it harder to stay in business, as a lot of these companies do not have the money to stay in business, Ehrlich said.

He expects network infrastructure cost will cripple most small 3G players and "merging, selling out" are the only solutions to keeping them alive.

We expect Sunday to be teaming up with another player to bid for a 3G license in Hong Kong, but refused to comment on it.

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