Hong Kong 2.3GHz spectrum auction

Hong Kong telecom regulator OFTA was led to conduct the spectrum auction due to a huge surge in mobile data usage in the area.

Three existing mobile operators and one new entrant took part in the auction of 90MHz of spectrum in the 2.3GHz band, which raised a total of HK$ 470 million.

Hutchison Telephone Company secured 30MHz for HK$ 150 million, while China Mobile Hong Kong Company paid HK$ 170 million for its 30MHz.

The other successful bidder was new entrant 21Vianet Group, which paid HK$ 150 million for 30MHz of spectrum. 21Vianet is the largest carrier-netural internet data centre services provider in China, with 58 data centres in operation and more than 300 PoPs in 36 major cities in China.

Hong Kong Telecom failed to secure any spectrum in the auction.

Each successful bidder has secured a 15-year licence from OFTA. Under the terms of the contract, within the next five years each will be required to provide a minimum coverage of mobile services to 50% of the Hong Kong population, or to provide coverage to a minimum of 200 commercial and/or residential buildings.

OFTA stated: “Over the past two years, mobile data services has continued to grow at a spectacular rate. As a result, the industry finds it necessary to continually provide for additional network capacities in order to meet the market demand.”

OFTA’s statistics indicate local mobile data usage of 3,175 terabytes in July 2011, or an average of 426 megabytes per 2.5G/3G mobile user. This is 7.3 times the mobile data usage over the same period in 2009.

An earlier spectrum auction held by OFTA in January 2009 had left 90MHz of radio spectrum in the 2.3GHz band unassigned. When OFTA received enquiries about its release in the second half of 2010, this led to its decision to auction off the remaining spectrum.

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