Total Licence Price:
No Auction held.

Winners: (HK$)
- Hong Kong CSL Limited ($288,812.12)
- Hutchison 3G HK Limited ($2,398,888.88)
- SmarTone 3G Limited ($1,388,888.8)
- SUNDAY 3G ($10,000.01)

The Telecommunications Authority in Hong Kong is pleased to announce that the Third Phase of the Auction for the 3G mobile services licensing and the Frequency Band selection process have been completed today.

The Telecommunications Authority (the "TA") is pleased to announce that each of the Provisional Successful Bidders has confirmed to the TA that the declaration made in its Connected Bidder Statutory Declaration comprised in its Application remains true and accurate in all respects. Accordingly, the Second Phase of the Auction will not be required as there is no Provisional Successful Bidder who is a Connected Bidder in relation to any other Provisional Successful Bidder. The TA is therefore delighted to announce that the Third Phase of the Auction will take place on Wednesday, 26 September 2001.

Without holding an auction, the Hong Kong government allocated 3G mobile licenses to the only four companies that bid for them. The licenses went to Hutchison 3G HK, a venture between local conglomerate Hutchison Whampoa Ltd. and Japan's NTT DoCoMo; CSL Ltd., a joint venture between Australia's Telstra Corp. and local carrier Pacific Century CyberWorks Ltd.; and local firms Smartone Telecommunications Holdings Ltd. and Sunday Communications Ltd.

Winners will pay 50 million Hong Kong dollars ($6.5 million) per year for the first five years and 5 percent of their 3G revenues each year thereafter for the 15-year license period. The minimum cost of each license will be 1.31 billion Hong Kong dollars ($169.7 million), based on the annual minimum fee that has to be paid if revenue royalties fail to exceed this amount.

Singapore Telecommunications Ltd said Monday it does not intend to bid for a 3G mobile phone license in Hong Kong, but it may partner another operator to offer 3G services in the territory.

Hong Kong said on Wednesday it will auction 3G mobile telecoms spectrum on a royalty basis that requires carriers to bid a minimum of 5% of their 3G network turnover. Under terms of the auction, scheduled for mid-September, carriers will be required to pay a minimum of HK$50 million (US$6.4 million) a year for the first five years, with rising annual minimum payments for the following ten.

Each winning licence holder will pay the same percentage royalty on its network turnover. Hong Kong plans to auction four 3G spectrum licences, and will require bidders to make a deposit of HK$250 million.

The Hong Kong government will issue four licenses for the provision of 3G mobile telephone services before the end of the year.

The issuing of licenses will be a two-stage process with potential 3G network operators first having to prove their ability to roll out a national 3G network.

Those carriers that pass this first stage will be required to enter an auction of 3G airwaves. The Hong Kong sale will be based on a royalty percentage rather than straight-out cash. Among other requirements is a license condition that will force 3G operators to reserve at least 30 percent of their network capacity for "mobile virtual network operators." This will allow smaller, more innovative companies to roll out 3G services on the networks of the four licensees.

The Hong Kong Office of the Telecommunications Authority has cancelled the June auction of the 3G mobile phone licenses to September.

Hutchison Whampoa and a joint venture between Pacific Century CyberWorks and Telstra are expected to acquire licences, while Hong Kong's other four carriers may divide the remaining two licences.

Hong Kong's auction for third-generation phone licenses could be delayed until the end of the year, if the relevant legislation can't be passed before the end of the current legislative session, according to a newspaper report Saturday.

The HK government plans to introduce extra measures to guard against possible collusion among the bidders for third-generation mobile services, according to a new consultation paper on rules for 3G auctions issued by Hong Kong telecoms regulator OFTA.

Under the proposed rules, the identities and bids of the bidders would not be disclosed publicly during the auction. The auction process would also be expedited, so as to conclude the proceedings as soon as possible after applications received.