Jurisdiction - Hong Kong
Reports and Analysis
Hong Kong – Communications Industry Predictions 2014.

29 January, 2014

 

 

2014 will be important for the re-assignment of 3G spectrum used by over 80% of total mobile data users as of Q4 2013.  The current assignments of the 3G spectrum will expire in 2016. The Communications Authority (CA) will adopt a hybrid approach, which consists of administrative assignments and a market-based auction, to re-assign the 3G spectrum. The incumbent 3G mobile network operators (MNOs) will be offered a right of first refusal to be re-assigned two-thirds of the 3G spectrum which each of the MNOs holds. The rest of the 3G spectrum is expected to be auctioned in Q4 of 2014.

 

The results of the coming re-assignment will be influenced by the CA’s decision on whether to consent to the proposed acquisition of CSL New World Mobile (currently the largest MNO in the city) by HKT (currently the smallest MNO). To increase likelihood of obtaining the CA’s consent, HKT has voluntarily offered pro-competition measures including not to participate in the auction of 3G spectrum in 2014 if the acquisition is approved.

 

The CA may refuse to give consent to the proposed acquisition if the CA considers that the proposed acquisition will give rise to anti-competitive concerns. If the proposed acquisition proceeds, the Li Ka-shing family (already controlling HKT and another MNO) will control more than 50% of mobile services in Hong Kong. It has been reported in local media that the CA will probably take more than three months in early 2014 to review whether the proposed acquisition will substantially lessen competition in the telecommunications market.

 

While the CA regulates mergers in the telecommunications currently, the recently established Competition Commission will have concurrent jurisdiction with the CA to decide whether to object to the proposed acquisition when the Competition Ordinance becomes fully effective on a date in 2014 to be confirmed.

 

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For further information, please contact:

 

Marcus Vaas, Partner, Bird & Bird
marcus.vass@twobirds.com

 

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