Hong Kong Nets $288 Million in Thriving 5G Spectrum Auction – Major Players in Action!

In an exciting development for telecommunications in Hong Kong, the local government has successfully raised HKD2.24 billion (approximately $288 million) through a recent auction for 5G wireless spectrum. The Office of the Communications Authority (OFCA) disclosed that this significant venture involved the sale of 110 megahertz of repurposed mobile spectrum over the course of a week.

Major Bidders and Their Acquisitions

Leading the charge, China Mobile Hong Kong emerged as the top bidder, acquiring a substantial 50 megahertz within the 2.3GHz spectrum band for a staggering HKD1.07 billion. Hutchison Telecom followed suit, securing the maximum allowable 10 megahertz in the 850MHz band, along with an additional 20 megahertz in the 2.3GHz band, totaling a significant HKD617 million.

HKT also marked its presence by obtaining 20 megahertz in the 2.3GHz band for HKD400 million, while SmarTone rounded out the major bidders with a purchase of 10 megahertz in the 850MHz band for HKD151.5 million.

Structure of the Auction

Over the auction's duration, a total of 110 megahertz was subdivided into 11 distinct blocks. OFCA stated that the awarded licenses will be valid for a period of 15 years, paving the way for telecommunications enhancements.

Government's Vision and Impact

An OFCA spokesperson emphasized that this auction aligns with the government's 2023 Policy Address initiative aimed at advancing telecommunications infrastructure. "Successful bidders will not only bolster existing 4G services but also pave the way for 5G and even future generations like 6G, significantly improving overall service quality while fostering innovation for all Hong Kong residents," the spokesperson explained.

Payment and Compliance Requirements

Operators participating in the auction have the option to either pay the total amount upfront or choose an annual spectrum utilization fee (SUF). To ensure compliance, each provisional bidder must present a Letter of Credit by January 13, 2025, to guarantee SUF payments. There are also performance bond requirements to facilitate adherence to network and service deployment standards.

Future Auctions and Expectations

In addition to this recent auction, OFCA is gearing up to hold another auction shortly, featuring a remarkable 400 megahertz block of spectrum in the 6GHz to 7GHz range.

Earlier in June, OFCA announced the results of the second round of frequency assignments within the 26 GHz and 28 GHz bands, indicating a robust telecommunications marketplace. A total of 1,200 megahertz of spectrum is anticipated to be allocated in the third quarter of this year, with major telecommunications players like China Mobile Hong Kong, HKT, Hutchison Telecom, and SmarTone expected to benefit.

The Race for 5G

The race for 5G implementation has already begun in earnest. China Mobile Hong Kong, Hutchison Telecom, and HKT launched their commercial 5G services in April 2020, while SmarTone followed suit with commercial services using Ericsson's Dynamic Spectrum Sharing technology in May 2020. Notably, local operators first acquired 200 megahertz of 3.5 GHz spectrum back in October 2019, with those licenses also extending over a 15-year period.

Conclusion

With ongoing developments and an eye toward the future, Hong Kong's telecommunications landscape is set for transformative growth, and industry watchers are eagerly anticipating the next phase of technological advancements to unfold. Stay tuned!