HK 3G winners will need to cover 95% of the population

date: May 30, 2001

Hong Kong 3G license bidders will be required to commit to covering around 95% of the population within five years, the government told lawmakers in a discussion on the draft of regulations on 3G mobile services regulations Tuesday.

The plan is to help to promote the development of the city's 3G telecommunications industry for its 6million population.

The Hong Kong government plans to sell four 3G mobile phone licenses in the city.

Lawmakers are expected to pass the required legislation by July, the auction is expected to take place in September.

The government is considering a blind auction, in which competitors won't know who their other bidders are. It also plans to ask interested parties to bid a percentage of future sales instead of offering cash up front, a method that dragged many European companies in debt in order to pay for their bids.

Losers of licenses can still compete because the government plans to require license-holders to allow rivals to set up virtual networks on their networks to foster competition.

The government said mobile virtual network operators are expected to replicate a large part of the infrastructure of the host mobile network operator, except for radio access networks. Other operators are allowed to negotiate access on a commercial basis.

Interconnection charges will be based on long run average incremental costs, including the capital cost of the network investment, the spectrum cost and cost of capital. The government said a suitable return for the licensee would be 20% annually for first three years.

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