HONG KONG-The government of Hong Kong is likely to be among the first in the Asia-Pacific region to clear spectrum and issue licenses for third-generation (3G) mobile phones, according to the Office of the Telecommunications Authority (OFTA).
“While the USA and Europe may take five years or more to clear frequencies for a new technology, Hong Kong’s small size (6.5 million people in 400 square miles) allows it to move faster,” said Mr. Gus M.H. Wong, chief engineer, OFTA’s Spectrum Management Division.
There is a price to pay for being early with new wireless technologies, however. “If we experience interference when we adopt different frequency bands for new communications technologies, it may be difficult to negotiate solutions with our neighbors until they have caught up with us and share the same problems,” said Mr. Wong.
Hong Kong has six second-generation (2G) operators with 11 networks supporting more than 3.9 million cellular phones-a wireless penetration of 57 percent, among the world’s highest. The telecom authority is focusing on the ITU’s five standards for the 3G radio interface.
“We want to help achieve a seamless, fully interconnected international 3G network, so that we can use the same equipment in Hong Kong, the USA or Europe, without any hassle. For this, we need compatible international standards as well as unified spectrum,” said Mr. Wong.
The interests of spectrum users in Hong Kong are supported by a consultative process, through a committee called the Radio Spectrum Advisory Committee (RSAC). The committee represents a wide range of industry associations, government departments, user groups and individual specialists.
A first consultation paper on the regulatory framework for 3G was issued by OFTA in March. “The main consideration is to ensure that customers can easily switch from one network to another to obtain similar services and to maximize convenience in using roaming services without having to change the mobile terminals,” said Mr. Wong.
In support of open and nonproprietary standards, OFTA will allow operators to use any International Mobile Telecommunications (IMT)-2000 standard. At present, air interfaces used by operators in Hong Kong include GSM 900, GSM 1800, TDMA and CDMA. IMT-2000 offers evolutionary upgrades for all these systems. “The mandatory use of a single 3G standard would reduce the flexibility of operators in evolving their 2G networks to 3G and limit the choice of terminal equipment by consumers,” said Mr. Wong.
Spectrum and licenses
In Hong Kong, spectrum in the 1880 MHz to 1900 MHz and 1895 MHz to 1906.1 MHz bands has been allocated for private cordless phones conforming to the DECT and PHS standards. To avoid compatibility problems with 3G, further studies will be conducted before these parts of the IMT-2000 bands are assigned.
If these cordless bands are omitted, and assuming a guard band is required between time division duplex (TDD) and frequency division duplex (FDD) systems, there will be 2 by 60 megahertz paired spectrum and some 25 megahertz to 29 megahertz unpaired spectrum available for terrestrial 3G mobile services in Hong Kong.
In addition, the International Telecommunication Union (ITU) has approved an additional 160-megahertz allocation for 3G terrestrial use, to be available before 2010. Spectrum overlapping with current 2G bands may also be allocated to 3G by the ITU.
In deciding Hong Kong’s spectrum allocation for 3G, account was taken of the complex U.S. situation, in which frequencies in the 1900 MHz band allocated for personal communications services (PCS) systems conflict with the IMT-2000 recommendations for 3G. OFTA believes Hong Kong should follow Japan, Europe and Australia in complying with the ITU’s IMT-2000 band plan.
OFTA said 3G architecture will require macro, micro and pico cells. New operators will need 2 by 15 megahertz to provide for paired spectrum for FDD macro cells, but existing 2G operators may upgrade their systems for this purpose and need only 2 by 10 megahertz. Between four to six licenses can be issued for 3G services, depending on the licensing model adopted.
OFTA is considering the following four licensing options:
Option 1: Open competition for four 3G licenses, to be allocated 2 by 15 megahertz paired, plus 5 megahertz of unpaired spectrum available later.
Option 2: Open competition for four to six licenses, but incumbent operators receive 2 by 10 megahertz of paired spectrum, while new entrants receive 2 by 15 megahertz, with both receiving 5 megahertz of unpaired available later.
Option 3: One or more licenses out of a total of four to be reserved for new entrants. Spectrum to be allocated as in Option 1.
Option 4: Similar to Option 3, but incumbents to receive 2 by 10 megahertz of spectrum, while new entrants would receive 2 by 15 megahertz, plus 5 megahertz available later. Five licenses could be offered.
In line with its technology-neutral policy, OFTA intends to allow the existing 2G operators, whether or not they are successful in obtaining 3G spectrum, to use any IMT-2000 standards within their assigned 2G frequency bands, for 3G mobile services.
“This could either act as a sop to those who do not get a 3G license, or provide a head start to 2G operators who also get a 3G license,” said Wong.
OFTA plans to issue licenses following its consultation with the telecom industry and the ITU’s finalization of frequencies expected in late 2000 or early 2001.
Hutchison’s plans
Hong Kong’s largest mobile operator, Hutchison Telecom, which has GSM and CDMA networks and a subscriber base of more than 1.4 million, is already planning its 3G participation. “Hutchison Telecom is actively developing WAP mobile Internet services, high-speed data transmission, m-commerce transactions, mobile multimedia services, as well as GPRS (General Packet Radio Service) technology, to facilitate our transition to third-generation mobile telecommunications,” said company spokeswoman Ms. Max Wong.
“Hutchison Telecom has also launched a series of preparatory activities to ensure that the company will develop the 3G mobile telecommunications technology that best suits Hong Kong’s unique geographical environment and market demands,” continued Ms. Wong.
“These include field testing of 3G mobile applications, the selection of the best 3G mobile technology including W-CDMA, investigations into the most cost-effective way of upgrading to 3G technology, technical applications and the development of advanced value-added services.”
Clearing the spectrum
Spectrum planning is a long-term activity, said OFTA’s Mr. Wong. “When we vacate an organization from a frequency block, we usually have to give them three to four years notice to let them amortize their equipment investment,” he said.
Although the ITU has not finalized the spectrum required for 3G, OFTA is recovering unused spectrum likely to be needed. For example, Wharf Group’s Cable Television, which is using microwave frequencies for MMDS, has agreed to vacate the frequencies by May 2001.
To encourage efficient use of MMDS systems used for point-to-point terrestrial communications, a spectrum charge has been introduced. OFTA also has to retrieve frequency bands used for fixed telecom links, the main one being the Hong Kong-Macau link in the 2.4 GHz band, which will be transferred to the 6 GHz band.
Auctions versus pageants
OFTA’s consultation paper on 3G evoked 47 responses from mobile and fixed-line operators, other Hong Kong organizations, mobile phone manufacturers and multinationals such as Lucent Technologies and British Telecom. These responses are available at OFTA’s Web site, www.ofta.gov.hk.
Fierce public debate has followed the consultation paper, and OFTA is under some pressure to move away from its currently planned “beauty pagean
t” method of awarding licenses. Auctions are the most obvious alternative, but in its consultation document, OFTA suggested that a
uctions might inflate the costs to network operators, resulting in higher services prices that would inhibit rollout of 3G services. Another drawback would be that rich, rather than innovative players, would get licenses.
Some commentators have created highly original solutions to the licensing issue, ranging from highly regulated environments to free market scenarios, where the telecom authority allows the market to decide how many networks should be set up.
A special complication for Hong Kong is that its spectrum is actually assigned by the ITU to China. “Unlike geographically isolated countries, such as New Zealand or Australia, we do not have the exclusive use of spectrum, so selling it might create unforeseen problems,” said Mr. Wong.
