SmarTone CEO: HK needs to catch up in mobile tech leadership

Anna Yip, Executive Director and CEO of SmarToneAlthough Hong Kong is still highly commended for its excellent mobile network quality and coverage, it is plainly lagging behind in terms of 5G readiness. To maintain its mobile tech leadership, SmarTone CEO Anna Yip said the Hong Kong Government should formulate a 5G spectrum release roadmap soonest.

While leading tech economies such as the UK, the US, Singapore and mainland China have either developed a roadmap for 5G development or are already selling 5G spectrum to mobile operators, Hong Kong has yet to set out a timeframe as to when 5G spectrum will be made available.

In Hong Kong, the spectrum market is shared among four mobile operators: HKT, Hutchison, China Mobile HK and SmarTone.

HKT, with about 35% spectrum market share, has been pressing the Hong Kong Government hard to release more spectrum for 5G services delivery. In May, HKT Group Managing Director Alex Arena slammed the Government for its slow progress in the release of spectrum, saying that Hong Kong is facing "a severe spectrum deficit" and "is seriously lagging behind the other developed markets in policy making."

As SmarTone CEO Anna Yip (pictured) just celebrated her one-year work anniversary in June, what does she expect from the Office of the Communications Authority's (OFCA) much anticipated spectrum reassignment? 

Hurry up with spectrum release

In OFCA's consultation paper released in March 2017, the telecoms regulator suggested a hybrid approach to reassign the spectrum to mobile operators for 5G services: by renewal and by public auction.

The spectrum to be released are: 1) 700-MHz, currently taken up by TV broadcasters; and 2) 3.5-GHz, currently taken up by satellite companies that provide satellite phone services.

Currently owning one-fifth of the spectrum, SmarTone CEO Yip said: "We hope that the TV broadcasters can migrate from analog to digital TV as soon as possible to free up the 700-MHz spectrum."

"As for the 3.5-GHz spectrum, it is being used by satellite companies in a fragmented manner. It is for the greater good that the Government reassigns this spectrum so that any unused spectrum can be sold to mobile operators."

Yip did not speculate when exactly OFCA will release the 5G spectrum, but said it was generally expected the release would occur sometime in 2020.

"We hope that the Government can speed up with the spectrum release," she said. She added that the Governments in South Korea, Japan, mainland China, UK and the US have already speeded up the availability of 5G spectrum.

"Spectrum is a major investment for the telco industry," Yip said. "It is important that we are advised how much spectrum is available out there, and when will they be made available for purchase. Only then can we properly plan ahead regarding what spectrum to buy and how much to buy (or renew)."

Hybrid approach for spectrum assignment

In the March 2017 consultation report, the Government suggested to renew the subscription of 900-MHz and 1,800-MHz spectrum in a hybrid approach: 40% of the 200-MHz spectrum available for reassignment is allocated to the existing operators, with the remaining 60% to be assigned through auction.

"The network spectrum is a very important resource for us mobile operators. We are very supportive of the Government's suggestion of renewing the 900-MHz and 1,800-MHz spectrums," Yip said.

As regards the assignment of the remaining 60% spectrum, Yip urged the Government to adopt appropriate measures to prevent any single player from dominating the entire available spectrum simply because it has the most capital. "To this end, the Government can impose an absolute cap on all players, such that one can only purchase only up to 40% of the total amount of 900/1,800-MHz spectrum up for re-assignment."

"Further, we suggest that the Government does not set too high a reserve price for the auction of the remaining 60% spectrum. To do so will impede fair and just competition."

Yip suggested the above recommended approaches would incur the least disruption to the existing mobile industry and the mobile services.