Hong Kong planning to close CDMA networks

[ShoresGuy]

Hong Kong planning to close CDMA networks

Hong Kong is proposing to issue a new licence from the vacated spectrum of the two existing mobile services licences offering CDMA and TDMA services, when the licences expire in November 2005 and July 2005 respectively. This was recommended in the second consultation paper issued by the Office of the Telecommunications Authority (OFTA) on the licensing of mobile services on expiry of the existing 2G licences.

The Deputy Secretary for Commerce, Industry and Technology (Communications and Technology), Mrs Marion Lai, said that in deciding on the future licensing arrangements, the relevant considerations were the need to ensure efficient use of spectrum, choice of services and continuity to customer services, as well as the need to provide a stable investment environment and maintain technology neutrality.

The consultation paper pointed out that the number of subscribers for the CDMA network fell from 280,000 in 2000 to around 40,000 in 2003, whereas for the TDMA network, the figure fell from 140,000 to around 30,000 during the same period.

"We are of the view that the spectrum under the two licences should be vacated upon their expiry for better utilization, which will in turn benefit the consumers at large. We therefore propose that the CDMA and the TDMA licensees should not be entitled to the "right of first refusal"," Mrs Lai said.

"We see opportunity to issue a new licence in the vacated spectrum to facilitate the introduction of innovative mobile data services supported by cdma 2000 standard, which is currently not adopted in Hong Kong. This will allow consumers to enjoy services and mobile phones or devices that have become successful and popular in places like Japan and South Korea. It will also enhance consumers' demand for mobile data services and hence increase revenue potential of the market to the benefit of all players.

For the issue of this new licence, the consultation paper proposes to adopt an approach similar to the one adopted in 2001 for the 3G licensing exercise, i.e. a hybrid licensing method consisting of pre-qualification followed by a royalty auction subject to minimum guaranteed payment. The auction will be conducted by using a single round sealed bid method. Apart from the two licences offering CDMA and TDMA services, there are also nine licences offering GSM and PCS services expiring during the period between November 2005 and September 2006. The Government proposes to offer the "right of first refusal" to the incumbent mobile service operators providing such services.

The consultation paper however notes that in the short term, the existing licensees will likely to continue to offer 2G services (including 2.5G and 2.75G services) after the issue of the new licences. As such, any requirement to immediately levy a spectrum utilization fee, which is a new cost element, with a fee level and structure similar to the existing 3G licensees would increase the cost of business quite abruptly.

"We therefore believe that initially there is a case for setting the spectrum utilization fee for 2G licensees according to a structure different from that for 3G licensees. However in the longer term there should be convergence of the two structures on principle and parity grounds," Mrs Lai explained.

The consultation paper proposes that the right time to remove the different treatment should be 1 January 2010 to allow sufficient time for the 2G licensees to factor the spectrum utilization fee fully in their cost structures.

Source

[jones]

CDMA may be gaining in the USA; but it it is losing ground outside USA.

[lordsutch]

Huh? From the article:

"We see opportunity to issue a new licence in the vacated spectrum to facilitate the introduction of innovative mobile data services supported by cdma 2000 standard, which is currently not adopted in Hong Kong. This will allow consumers to enjoy services and mobile phones or devices that have become successful and popular in places like Japan and South Korea. It will also enhance consumers' demand for mobile data services and hence increase revenue potential of the market to the benefit of all players.

CDMA 2000 is CDMA. It sounds like they want to bring in someone willing to upgrade from IS-95 to CDMA 2000, and the incumbent operator isn't positioned to do it. Particularly since the mainland has lots of CDMA, it would make no sense to shut off CDMA in Hong Kong.

[Tony E!]

wonder how much this is going to affect manufacturers of cdma handsets from designing new cdma phones, are we going to have less phones to choose from since it seems that the best looking cdma handsets are first sold in Asia.

[larry]

That's not good to hear because Sprint just activated CDMA roaming agreements in Hong Kong last year.

[GoodmanR]

Originally posted by: Tony E wonder how much this is going to affect manufacturers of cdma handsets from designing new cdma phones, are we going to have less phones to choose from since it seems that the best looking cdma handsets are first sold in Asia.

I don't think it will change anyones business plan given how few subsribers these networks have, manufacturers stopped worrying about this market and CDMA long ago.

EDIT: Also, the good handsets come to S. Korea first, and CDMA is still going to be in Korea.

[lordsutch]

Again, I think the title is misleading; all that the article says is that the TDMA and 2G CDMA incumbent operators won't get "right of first refusal" on the next auction of their spectrum. Furthermore, the Hong Kong government specifically mention that they want to attract CDMA 2000 (e.g. 3G CDMA: 1xRTT, EV-DO, or EV-DV) services in some of the vacated spectrum.

In other words, this is a good thing for CDMA in Hong Kong.

[jayc]

Originally posted by: lordsutch Again, I think the title is misleading; all that the article says is that the TDMA and 2G CDMA incumbent operators won't get "right of first refusal" on the next auction of their spectrum. Furthermore, the Hong Kong government specifically mention that they want to attract CDMA 2000 (e.g. 3G CDMA: 1xRTT, EV-DO, or EV-DV) services in some of the vacated spectrum. In other words, this is a good thing for CDMA in Hong Kong.

I agree... misleading topic.

[NYCDru]

Originally posted by: GoodmanR EDIT: Also, the good handsets come to S. Korea first, and CDMA is still going to be in Korea.

Oh Yeah. Almost all the Korean handsets are pure hotness and CDMA isn't leaving that country anytime soon.

[jones]

Maybe CDMA should lower their royalties, so it could be adopted elsewhere.
North Korea did'nt go w/ it due royalities.