************************************************************

Following is a speech by the Secretary for Information Technology and Broadcasting, Mrs Carrie Yau, at the opening conference of the Hong Kong Information Infrastructure Exposition and Conference 2001 today (February 22):

Dr Ure, Mr Bouchard, distinguished guests, ladies and gentlemen,

First of all, a warm welcome to everyone who has come all the way to Hong Kong for this morning's conference, a major highlight of the Hong Kong Information Infrastructure Exposition and Conference 2001. It is great to see so many overseas guests in Hong Kong for an event such as this which showcases all that we have to offer as an IT and telecommunications hub in the region.

Today's conference features a fine selection of speakers from different sectors of the industry - from policy makers to CEOs and senior executives of leading, global IT firms. They will share with us their thoughts and insights on issues such as business opportunities in the Mainland of China, the latest technological developments and the Asian market in the Information Age.

When we talk about the global IT world, there is an enormous range of interests. Some people are fascinated with the business possibilities that e-commerce can bring to us. Others may be anxious about the emergence of mobile commerce as a new platform for various types of user-friendly applications to be developed. Some are interested in how the next generation Internet will be affected by advances in virtual reality.

But no matter what area interests you, few people would dispute that technological advances will be an integral part of the world's future economic and social development. IT applications are a part of almost every business operation, from accounting to inventory management to customer services and security control. And it covers all sectors of the economy, from retail to utilities, manufacturing and transportation.

Companies around the world now focus their attention on exploiting IT in their operations in order to make their business competitive. When the legendary Jack Welch, the CEO of General Electric, was asked how high the Internet was on his company's agenda, he replied that 'in terms of priority, it's number one, two, three and four'.

Hong Kong is no different. Our entrepreneurs and CEOs are quick to seize the opportunities arising from advances in IT. In fact, many started taking proactive measures a number of years ago to use IT to strengthen or rejuvenate their conventional businesses. For example, the world's first commercial video-on-demand service was introduced in 1995 in Hong Kong. A utility company launched Hong Kong's first Internet-on-TV service. The Stock Exchange of Hong Kong has developed its AMS/3 using Internet and mobile communications technology to support stock trading online. These few examples illustrate how companies here have responded positively to the digital wave that is sweeping across the whole world.

The Hong Kong Government is also playing its part to breed new technology businesses. For example, we have just announced the licensing framework for 3G Mobile Services. There will be a prequalification process, followed by spectrum auctioning. This commits the applicants to providing a quality 3G network within a reasonable period of time. The spectrum auction that follows, unlike the more traditional auction of a dollar amount, will be based on a percentage of royalty on turnover. Auction by revenue-based royalties is a model which is pro-entry, pro-competition and pro-consumer. We hope to attract more investors to the Hong Kong 3G market.

Another feature of our regulatory regime for 3G that is worth mentioning is our "Open network requirement". To encourage competition at the services and applications level, 3G network operators will need to lease at least 30% of capacity to non-affiliated service and content providers. We believe that an open network is what the consumers want and that content or application providers, large and small, are encouraged to innovate and bring in new 'killer applications' under the 3G platform.

At the macro level, we are currently reviewing our IT Strategy, taking into account the latest developments in information and communication technologies, as well as the trend of ongoing globalisation. We will endeavour to formulate visionary and effective policies that can help us to further develop hi-tech businesses based on a well founded 'e-infrastructure'. We expect to release the new strategy very soon. If you are interested in Hong Kong's telecommunications and IT infrastructure I invite you to drop by the Hong Kong SAR Government Pavilion in Exhibition Hall One.

The fact that so many people are here for today's conference and expo is clear evidence, I believe, of the tremendous opportunities on the horizon for the development of the IT, telecommunications and technology sectors in Asia. I am sure that today's conference will provide us with plenty of food for thought on how best to capture the promise of Asia's information boom.

Thank you.

End/Thursday, February 22, 2001

NNNN