Hong Kong's mobile operators may make a legal challenge to a government plan to eventually carve off a third of their 3G spectrum.
Hutchison, PCCW-HKT, CSL and SmarTone may take to the courts their opposition to the Communications Authority's proposal on what to do once their existing 3G licenses expire, South China Morning Postreported. citing insider sources.
The operators have already written a public letter to an ICT panel within Hong Kong's legislative council, urging lawmakers to reject the so-called hybrid option for reallocation of spectrum.
The Communications Authority has proposed three options for what to do with spectrum once the operators' existing 3G licenses expire in 2016.
The first involves reallocating the licenses at a set fee, the second involves re-auctioning the entirety of the spectrum, and the third is a hybrid approach between the two.
Under this model - which is the Authority's current preferred option - two thirds of the operators' holdings would be returned for a fee, while the remaining third would be sold via a spectrum auction.
Hutchison, PCCW-HKT, CSL and SmarTone allege that this approach is being considered primarily to allow China Mobile – which currently only has 2G licenses in Hong Kong and must provide 3G via MVNO arrangements – to secure its own spectrum.
But the 3G MNOs believe that having to surrender a third of their 3G spectrum would lead to dropped calls and congested networks, and that Hong Kong's 3G market is already hotly competitive without the presence of a fifth player.