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Successful conclusion of auction of radio spectrum in 2.5/2.6 GHz band

     The Office of the Communications Authority (OFCA) announced today (March 19) that four mobile network operators have successfully bid for a total of 50 MHz of radio spectrum in the 2.5/2.6 GHz band for a total sum of spectrum utilisation fees (SUF) of HK$1.54 billion.

     "Customer demand in the local mobile telecommunications market has continued to be buoyant, thanks to the launch of the 4G service in 2011 that has greatly enhanced user experience in deploying high speed mobile broadband services. The assignment of 50 MHz of radio spectrum through this auction will enable the successful bidders to deploy state of the art mobile broadband technologies and provide the necessary network capacities to further develop 4G services in Hong Kong," a spokesman for OFCA said.

     Four existing mobile network operators and one new entrant took part in the auction and competed equally with one another for the precious spectrum based on the same set of auction rules. Conducted on an Internet-based software platform, the auction commenced on March 18, 2013 and came to a satisfactory conclusion after a total of 18 bidding rounds on March 19, 2013. The provisional successful bidders, the radio spectrum under bidding and the SUF determined in the auction are set out at Annex.

     "This is the eighth auction that we have conducted since 2001. Auctions are an economically effective method for assigning radio spectrum as a scarce public resource to those operators who value it the most and are able to put it to the most efficient use. While all the provisional successful bidders in this spectrum auction are existing mobile network operators, the fact that a new entrant has participated in the auction demonstrates that even though the mobile telecommunications market in Hong Kong is extremely competitive, it continues to attract new investors," the spokesman for OFCA continued.

     "The average SUF as determined by the auction today, at $30.8 million per MHz, is about 80 per cent higher than that obtained in the auction of the same frequency band held in January 2009. This reflects the increasing value of radio spectrum as a scarce public resource, which is the major driving force behind the continual growth of our mobile broadband services. Despite the higher level of SUF, given the vibrant competition in our mobile market, we are confident that consumers will continue to enjoy quality mobile services with a wide range of choices at affordable prices," the spokesman for OFCA added.

     All provisional successful bidders are required to pay the SUF, to submit a performance bond and to comply with other necessary regulatory requirements within 30 business days after the issue of the notice. The spectrum would be assigned to each successful bidder for a term of 15 years, until the year 2028.

Ends/Tuesday, March 19, 2013
Issued at HKT 19:20


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