Hong Kong Considers More 3G
By Eric Lin, Wed Aug 11 23:30:00 GMT 2004

Hong Kong's Office of the Telecommunications Authority (OFTA) is considering issuing a fifth 3G license. In order to open up the spectrum required for the additional license, OFTA would revoke the license of TDMA operator CSL and Hutchison's CDMA network.

OFTA won't make a decision until fall, so Hutch has launched a full scale assault in hopes of growing quickly enough this summer to make the government think twice before junking the network. (OFTA would revoke the two licenses on the grounds that the networks are under-ultilized.) It has linked up with Hutchison's land-line provider and will offer a combined package that includes a landline with 2 numbers, a free mobile phone, and free mobile calls within a 10 km radius of the subscriber's home all for HK$ 88 (US $11.25). Calls outside of the 10 km radius are only HK$1 per minute (about 13 cents).

Hong Kong has already issued four WCDMA 3G licenses, but is considering the fifth for the sole purpose of launching a CDMA 2000 network. OFTA is impressed with the success of 3G data on South Korean and Japanese networks, and hopes to spur lagging data uptake by launching the same type of network.

As IDC Analyst Davina Yeo points out, CDMA 2000 technology is not what makes data services so successful on these networks. Rather it is the cooperation between handset manufacturers, operators and content developers that has created successful data environments. After all, DoCoMo is using WCDMA technology, but by continuing the successful i-mode model 3G uptake is rather good and continues to grow.

Four 3G networks competing for a total of 7 million subscribers is already a tight race. Adding a fifth network may do more harm than good. Hong Kong could easily encourage data uptake other ways. OFTA could work with operators to help them emulate success stories from Asia and Europe. It could even encourage the growth a local mobile developer community by helping startups with some of its own money or a fund gathered from the carriers. After all the carriers stand to gain the most from strong mobile applications since they would be the ones to finally see an uptake in mobile data tariffs.