Hong Kong, China – Transition to the Unified Carrier Licensing Regime

In April 2007, the Telecommunications Authority (TA) of Hong Kong, China made a recommendation to the Secretary of Commerce and Economic Development (SCED), proposing that the Secretary amend the Telecommunications Ordinance to introduce a unified carrier licensing regime.  This recommendation was set out in a Statement issued by the TA entitled, “Deregulation for Fixed-Mobile Convergence”.  In December 2007, both the Secretary and the TA issued public consultation papers on various aspects of the proposed regulatory regime for unified carrier licensing.  The consultations papers issued by both the Secretary and the TA raised questions related to how to transition from the existing licensing regime to the unified carrier licensing regime.

 

In May 2008, the TA released a Statement entitled “Licensing Framework for Unified Carrier Licence”.  This Statement set out the TA’s conclusions about how the transition to the unified carrier licensing regime should occur.  The details of the TA’s conclusions are summarized below. 

 

In its Statement, the TA stated that once the unified carrier licence has been established and the new regime has been formally created, the TA would only grant unified carrier licences (UCLs).  The TA thus will no longer issue fixed and mobile carrier licences.

 

The TA also stipulated that existing carrier licences will be replaced by UCLs when they expire.  Alternatively, these existing carrier licences may be converted to UCLs before they expire on a voluntary basis.

 

The TA made some comments that apply specifically to certain licensees.  The holders of the four fixed telecommunications network service/fixed carrier licences are permitted to apply to the TA for the replacement of the licences with a UCL when these licences expire in 2010.  The TA also stated that the current universal service provider, PCCW-HKT Telephone Limited (“PCCW”), will continue to be subject to a universal service obligation upon the replacement of its fixed carrier licence by UCL. Other special obligations under its existing licence which was granted in January 2005 for implementation of the ex post tariff regulatory regime are considered to have ongoing relevance and therefore will be maintained under the UCL.

 

With respect to mobile carrier licences, the TA invited these carriers to apply for a conversion of their existing licences to a UCL.  The TA also stated that in the event of a conversion of licence, the mobile carrier licensee’s existing spectrum rights obligations related to the payment of spectrum utilization fees, performance bond, and open network access requirements will continue to apply under the UCL.

 

Table 1 summarizes the period of validity for a UCL granted under different circumstances during the transition period.

 

Scenario

Period of Validity for UCL

New application

15 years

Replacement of existing carrier licence upon its expiry

15 years

Conversion of existing carrier licence before expiry with no change in the scope of the licence

Same as the remaining term of the existing carrier licence

Conversion of existing carrier licence before expiry – other cases

15 years

Source: Telecommunications Authority of Hong Kong, China, “Licensing Framework for Unified Carrier Licence”, Statement of the Telecommunications Authority, 9 May, 2008.

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