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LCQ19: SmarTone's network outage

     Following is a question by the Hon Paul Tse and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (April 25):


     It has been reported that, due to the power outage in the building in which the New Territories switching centre of the SmarTone Telecommunications Limited (SmarTone) is situated, its mobile communication and Internet services for various districts of Hong Kong Island, Kowloon and the New Territories were disrupted on April 9, 2012 for about eight hours, affecting as many as 1.5 million users. Yet, SmarTone had still not given any explanation or made any announcement on the incident by that evening and the company released a statement on the disruption only by April 10. In this connection, will the Government inform this Council:

(a) whether the authorities have assessed the impact of the aforesaid incident on the daily operation of Hong Kong as an international financial centre; if they have, of the assessment results; if not, whether an assessment can be conducted as soon as possible;

(b) whether telecommunications service providers (service providers) are required by the Government to take contingency measures to minimise the inconvenience and losses caused to users during service disruptions; if so, of such contingency measures; if not, the reasons for that;

(c) in response to the aforesaid incident, whether the Government has considered enhancing its supervision of large service providers and imposing heavier penalties on service providers for contraventions of regulations so as to ensure the stability of telecommunications services and reduce the chances of occurring similar incidents;

(d) given that some academics have pointed out that at present, service providers should normally provide "three levels of support" in their service delivery systems to ensure that services will remain unaffected during system breakdown but some newspaper reports have pointed out that SmarTone provides only "two levels of support" in its service delivery system, rendering it unable to repair the system immediately during system breakdown, whether the Government will consider setting standards on the stability of service delivery systems to safeguard the public's interests;

(e) given that during the aforesaid incident, quite a number of members of the public called the customer service centre of SmarTone or visited its stores to enquire about the cause of the incident, but different replies were given by its customer service centre and stores, of the Government's existing mechanism or policy to safeguard the right of telecommunications service users to be given timely information in case of similar incidents;

(f) whether the authorities have assessed the number of standby officials and healthcare personnel of various policy bureaux, government departments and hospitals who needed to use the services of SmarTone during the disruption of its services, as well as the impact of the incident on their work; if so, of the assessment results; if not, whether an assessment can be made as soon as possible; and

(g) in response to the aforesaid incident, whether the Government has considered requiring the five service providers with the largest market shares to come up with an emergency response mechanism so that in case one service provider suffers from network failure, the others will provide communication network to the affected users to ensure that the service is not disrupted?



     My reply to the question raised by the Hon Paul Tse is as follows:

(a) The question tapped on the incident which happened on a public holiday in Hong Kong. Our stock market and major financial institutions were closed on that day. The Administration did not receive any reports that the abovementioned incident had impacted on Hong Kong's financial system. The abovementioned incident has minimal impact on the overall operation of the Hong Kong's financial system.

     In fact, the Government has already formulated a contingency mechanism with financial regulators to ensure effective communication among financial regulators and timely response in emergency situations so as to maintain market operation as far as possible.

(b) Under the licence conditions, licensees shall at all times during the validity period of their licences operate, maintain and provide a good, efficient and continuous service in a manner satisfactory to the Communications Authority (CA). To comply with the licence conditions, network operators are obliged to restore the service affected as soon as possible in case of service suspension or disruption so as to minimise the inconvenience caused to users. According to the Guidelines for Fixed and Mobile Network Operators for Reporting Network Outage (Guidelines) (Note) issued by the Office of the Communications Authority (OFCA), network operators are responsible for providing prompt information to their customers on network outages resulting in service suspension or disruption.

(c) Section 36C of the Telecommunications Ordinance (TO) provides that, where a licensee fails to comply with any licence condition, the CA may impose a financial penalty not exceeding $200,000 on the first occasion, and not exceeding $500,000 and $1,000,000 respectively on the second and subsequent occasions. Other penalties available to the CA include issuing directions to a licensee under section 36B of the TO, requiring it to take such action as the CA considers necessary in order for the licensee to comply with the conditions of its licence.

     According to the Guidelines, SmarTone is required to submit a full report within 14 working days after the incident (i.e. on or before April 27), giving a detailed account of the measures which have been, or will be, taken in order to prevent similar incidents from happening again, as well as an implementation plan for the proposed measures. The CA will carefully consider the report submitted by SmarTone and, taking into account all circumstances of the incident, determine whether there has been non-compliance. If so, regulatory action will be taken as appropriate.

(d) According to SmarTone's preliminary report, in addition to the building's normal power supply system, its switching centre in Shatin is supported by double power backup systems, including a standby battery system and a backup generator. At the beginning of the incident, the standby battery and backup generator functioned properly. Subsequently, the backup generator malfunctioned and the circuit breakers were triggered. The resulting power outage disrupted the service of 25% of Smartone's cell sites.

     The CA will carefully study the report submitted by SmarTone, investigate the cause of the incident, and confirm whether SmarTone has taken all appropriate measures to prevent similar incidents in the future.

     The OFCA has written to all fixed and mobile network operators, requesting them to review the power supply systems of their equipment in order to forestall the occurrence of similar incidents that may affect their network services. In view of the SmarTone incident, the OFCA, together with the network operators, will examine the need to improve the reliability of their power supply systems so as to ensure a high quality of network services.

(e) We agree that the customers affected by network service disruption or suspension definitely have the right to be informed. Therefore, it is stipulated in the Guidelines that network operators, having first-hand information about the operational status of their networks and services, should be responsible for providing prompt information and advice to their customers on outages. After the SmarTone incident, OFCA has written to network operators, urging them to review and enhance the existing notification mechanism on network outages. It will also meet with the operators to follow up the matter.

(f) Standby arrangements, including the means of communication with standby officers in case of emergency, are made by government bureaux and departments according to their operational needs. As to whether any standby officers use the mobile telecommunication service of SmarTone, we do not have the relevant information since officers are generally not required to use the services of specific telecommunication service providers.

     As far as medical personnel are concerned, hospital services under the Hospital Authority (HA) were not affected by this incident. Public hospitals use the Private Automatic Branch Exchange (PABX) system, which is a fixed-line telecommunication system, as their major telecommunication tool and mobile phone is only used as a supplementary tool. HA's hospitals have devised contingency plans for failure in telecommunication systems and conducted drills regularly.

(g) The implementation of a mechanism to forward communications to other network operators in the event of network failure involves a number of considerations, including technical feasibility, efficient use of the spectrum, operators' network capacity and cost-effectiveness of resource allocation.

     The Government considers that in the event of network failure, the telecommunication operator's first and foremost task is to restore its service as soon as possible and disseminate timely information to the affected customers about the incident, such as the districts and areas affected and the estimated time of service resumption, so that they can keep abreast of the situation and make proper arrangements. In view of the SmarTone incident, the OFCA, together with network operators, will review the notification mechanism on network failure and explore technical options for enhancing the stability and reliability of telecommunication networks, including the feasibility of forwarding communications to other network operators in the event of network failure.

Note: The Guidelines apply to "telecommunications network operators", i.e. fixed network operators, mobile network operators, short message service licensees, or international value-added network services operators who provide service for the delivery and exchange of short messages among fixed and mobile networks.

Ends/Wednesday, April 25, 2012
Issued at HKT 13:39


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