The Government has this week issued an Information Memorandum, inviting applications for Hong Kong's third generation mobile services (3G) licences and setting out the reserve prices for the 3G auction, the auction rules and various other elements of the licensing framework.
A spokesman from the Information Technology and Broadcasting Bureau confirmed: 'As announced in February this year, our hybrid method for the issue of four 3G licences involves a pre-qualification process followed by spectrum auctioning. The hybrid method will help ensure the quality of future 3G networks as well as allocate spectrum in a fair and efficient manner.'
He added: 'Recognising the recent downturn of the telecommunications market, we have introduced a royalty-based payment scheme that is intended to minimize the financial burden on operators. The royalty scheme is underpinned by a schedule of minimum payments, which minimise government's credit risk but allow it to share the upside of the 3G business.'
The Government also unveiled the reserve prices for the auction together with the bidding schedule which defines the minimum annual fees related to given royalty percentages. For the first phase auction (i.e., the royalty auction), the reserve price is five per cent of network turnover, subject to an annual minimum payment of HK$50 million for each of the first five years, and rising annual payments from year six onwards during the 15-year licence period.
'In setting the reserve price, we aim to encourage entry to the auction, but are also mindful to set a reasonable minimum price for a scarce public resource like spectrum. We have also taken the current market conditions into account. The reserve price represents a fine balance of all the relevant factors,' the spokesman elaborated.
He continued: 'To tie in with the scheme of royalties and minimum annual payments, we have also specified a bidding schedule which lists out the series of annual minimum payments corresponding to each royalty percentage bid. The schedule is designed to discourage irrational bidding by accelerating the increase in minimum payments at a rate faster than the royalty percentage increase.'
The Government has also set the reserve prices for the second and third phase auctions, i.e the mechanisms to resolve any connections between bidders in the unlikely event that they arise and to allocate specific frequency bands to the successful bidders. The reserve prices for both mechanisms have been set at HK$0, because the objective to set a reasonable minimum price for the spectrum is achieved by the reserve price for the first phase auction.
With the support of the Legislative Council, the Telecommunications (Amendment) Bill 2001 was passed and enacted in May 2001. The relevant subsidiary legislation also took effect in July 2001 to provide the legal basis for the 3G licensing exercise.
A copy of the Information Memorandum is available on the website of the Office of the Telecommunications Authority at: http://www.ofta.gov.hk
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment