Hong Kong’s dominant cellular operator Hongkong Telecom said it deeply regrets that the government failed to award it one of six new wireless licenses, and intends to discuss the matter with Hong Kong officials.
Fourteen companies bid for the 10-year personal communications services licenses offered by the Hong Kong Office of Telecommunications Authority. Among the contestants were the country’s four cellular operators: Hongkong Telecom, SmarTone, Hutchison Telephone Co. Ltd. and Pacific Link Communications Ltd.
But only Hutchison and Pacific Link were awarded new licenses. The other four winners are Mandarin Communications Ltd., New World PCS Ltd., P-Plus Communications Ltd. and People’s Telephone Co. Ltd. Primarily, the ventures are led by Hong Kong investment firms and paging companies.
The government said the license contest had been feverish, but it was pleased to have “four new companies joining the existing field” of cellular operators.
Hongkong Telecom remarked, “The company strongly believes that its PCS submission to OFTA is highly competitive and has demonstrated both the technical expertise and extensive market knowledge of the company for launching a successful service.”
Hongkong Telecom is owned 57.5 percent by U.K.-based Cable & Wireless plc. It has about 34 percent of the Hong Kong cellular market share.
The other cellular operator that was rejected, SmarTone, has about 20 percent of the Hong Kong cellular market share. The company is led by the investment firm of Sun Hung Kai & Co. Ltd. and is held 30 percent by U.S.-based AT&T Wireless Services Inc.; other SmarTone partners include Hong Kong paging network operator ABC Communications Holdings and a branch of the China Ministry of Posts and Telecommunications.
San Diego-based Qualcomm Inc. had been in the running as well, in a consortium that included Singapore Telecom. Qualcomm had hoped to build a Code Division Multiple Access network in Hong Kong, which would have been the nation’s second CDMA network. Hutchison launched CDMA cellular service in October 1995.
The Hong Kong government has not adopted a single PCS technology standard.
OFTA said the licenses will continue to be valid after June 30 because they are protected by the Hong Kong Special Administrative Region. Control of Hong Kong is set to revert to China June 30.
“The successful bidders have offered prices which are considerably lower than existing cellular prices and improved quality of service,” said Stephen Ip, secretary for economic services. “The PCS licensees will be held to meeting these commitments through large performance bonds.” The licenses will be reviewed at mid-term.
Hong Kong has more than 1 million cellular subscribers and expects strong growth to continue, increasing the need for more suppliers of service, Ip said.
