Hong Kong Kicks Off 3G Wireless Rule-Setting

HONG KONG (03/23/2000) - Hong Kong's telecom regulator expects to issue four to six licenses for third-generation (3G) wireless broadband services later this year and will press carriers to adopt interoperable standards, according to a consultation paper released this week.

With the paper, the Office of the Telecommunications Authority (OFTA) took the first step toward licensing 3G providers, proposing methods of regulating the technology and allocating radio spectrum while asking for feedback on the proposals. OFTA asked for responses by May 22.

3G is designed to extend broadband services to mobile phone handsets and other portable devices, potentially kicking off a wide range of information and e-commerce services that users can take advantage of anytime, anywhere. The technology will allow for wireless transmission speeds as high as 384K bits per second (bps) for mobile users and 2M bps for stationary users of portable wireless devices.

Although OFTA said in the paper that it wants to let carriers use any standard under the International Telecommunications Union's IMT-2000 specifications, it will encourage interoperability so consumers can easily change providers and use their 3G handsets outside Hong Kong.

The agency proposed four possible methods of allocating spectrum that would allow for between four and six operators. OFTA said it will seek a level playing field between incumbent and new carriers but may allow existing providers to build on their existing second-generation wireless mobile networks, potentially giving them an advantage. There are 11 mobile phone service providers competing today in the Hong Kong market all of which have their own spectrum in which to offer services.

OFTA intends to allocate licenses on the basis of merit, as it has for existing mobile phone licenses, and not by auction, the paper said.

Analysts said the agency's approach seemed fair overall and was likely to help Hong Kong remain a competitive and innovative market for mobile communications.

"The approach they are taking seems very consistent," said Sandra Ng, an analyst at International Data Corp. (IDC) Asia-Pacific, in Hong Kong. "They are trying to do a balancing act between protecting the consumer and trying to be fair to the existing players."

Ng pointed out that OFTA is planning for services to become available in 2001, as opposed to a 2002 launch predicted in most other markets.

"They're trying to bring forward all the new and innovative technologies into the market, to benefit consumers," Ng said.

In Asia's hot wireless market, "Hong Kong has the first-mover advantage," Ng said.

Another analyst pointed out that OFTA did not address content issues, such as whether service providers should be able to tie themselves tightly to content providers or whether openness should be enforced.

"That is one issue that may have to be addressed at some stage," said Nicholas Khoo, an analyst at Gartner Group Inc., in Singapore.

OFTA, in Hong Kong, can be reached online at http://www.ofta.gov.hk.

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