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The following is issued on behalf of the Communications Authority:
The Communications Authority (CA) announced today (January 3) its decision not to commence an investigation under section 7P of the Telecommunications Ordinance (TO) in respect of the acquisition of 100 per cent equity interest of China Mobile Hong Kong Corporation Limited (CMHKC) by Hong Kong Television Network Limited (HKTVN) that took place on December 20, 2013 (the acquisition). The CA's decision is made on the basis of its assessment that the acquisition does not give rise to a concern that it may have, or is likely to have, the effect of substantially lessening competition (SLC) in the relevant telecommunications markets.
On December 20, 2013, HKTVN made a public announcement concerning its plan to launch over-the-top and mobile TV services. As part of the plan, HKTVN had, through its wholly-owned subsidiary Talent Ascent Limited, completed on the same day the acquisition of 100 per cent of the equity interest of CMHKC from China Mobile Hong Kong Company Limited (CMHK), one of the five mobile network operators (MNOs) in Hong Kong.
As CMHKC holds a unified carrier licence (UCL) under the TO, the acquisition constitutes "a change in relation to a carrier licence" and triggers the operation of section 7P of the TO which regulates mergers and acquisitions involving carrier licensees. Under the TO, where a transaction falls within the scope of section 7P, the CA may, within two weeks after it knows or ought reasonably to have known about the completion of the transaction (whichever is the earlier), commence an investigation to decide whether or not the transaction has, or is likely to have, the effect of SLC in a telecommunications market.
Under the UCL that CMHKC holds, one frequency multiplex of 8 MHz (678 - 686 MHz) in the UHF Band is assigned to it till August 30, 2025, for the provision of broadcast-type mobile TV services and public mobile radiocommunications services.
"In considering whether the acquisition raises any competition concern such that an investigation under section 7P of the TO should be commenced, the CA considers that the relevant telecommunications markets are likely to be the broadcast-type mobile TV services market, the mobile TV services market (which includes also streaming-type mobile TV services), as well as the mobile telecommunications services market," said the CA's spokesman.
"In so far as the broadcast-type mobile TV services market is concerned, as of today, CMHKC is the only operator which is assigned with spectrum to provide the services. The competitive landscape is unaltered after the acquisition despite the change of ownership of CMHKC. The CA has therefore come to the view that the acquisition does not give rise to any SLC effect in the broadcast-type mobile TV services market," added the spokesman.
"On mobile TV services market, which includes both broadcast-type mobile TV services and streaming-type mobile TV services, the assessment also stands as currently, only the five existing MNOs, including CMHK, are offering such services, and HKTVN is not a participant. With CMHKC's disassociation from CMHK and now under the HKTVN group, and the fact that CMHK is able to continue to offer streaming-type mobile TV services under its existing UCL, CMHKC becomes a new independent operator in the mobile TV services market. In that sense, even though the overall number of market participants remains the same at six, with the emergence of an independent operator as CMHKC post acquisition, competition in the mobile TV services market is arguably enhanced, rather than lessened. The CA concludes that the acquisition does not give rise to any SLC effect in the mobile TV services market," explained the spokesman.
"As to the mobile telecommunications services market, there is also no competition concern. HKTVN was not a participant in this market pre acquisition. It has confirmed with the CA that it has no intention to enter into the market post acquisition. As for CMHK, it will continue to offer mobile telecommunications services under its existing UCL post acquisition. As regards CMHKC, although the UCL it holds entitles it to offer mobile telecommunications services, no mobile telecommunications services are actually provided under that licence before the acquisition. Hence, the competitive landscape of the mobile telecommunications services market both before and after the acquisition remains the same. The CA is therefore of the view that the acquisition does not give rise to any SLC effect so far as the mobile telecommunications services market is concerned," said the spokesman.
"Having assessed the competitive landscape before and after the acquisition, the CA is of the view that the acquisition is not likely to result in any change in the market structure or increased market concentration in relation to any of the relevant telecommunications markets identified. As such, the CA has decided that it will not commence an investigation in relation to the acquisition under section 7P of the TO," the CA's spokesman concluded.
Ends/Friday, January 3, 2014
Issued at HKT 16:40
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