Last 3G license up for tender, will SmarTone stand a chance?

Wednesday, March 4, 2009
Issue 630, Page 5
Word count: 739
Published in: Macau Daily Times

By Poyi (Natalie) Leung

This will be the last chance for SmarTone, if the company wishes to continue its telecom business in Macau after mid 2016 when its 2G license expires, as the SAR’s last 3G license is going to be put up for tender in May this year.

CTM, Hutchison and China Telecom (previously known as China Unicom) were the local operators which won the open tender in 2006 for three of the four third-generation (3G) telecom network licenses the SAR government first issued.

While SmarTone and Kong Seng Paging lost the bid, the former’s second-generation (2G) license was supposed to expire on July 8, 2010, but early this year the government extended the date by six years to 2016.

At the same time, CTM and Hutchison’s 2G licenses have been renewed for two years until July 8, 2012.

According to the government’s timetable, existing 3G operators’ 2G licenses must have to be ceased in 2012 at the latest, in order to allow the 2G telecom network to gradually exit the Macau market.

As for SmarTone which does not own a 3G license, its current license cannot be renewed again after it expires in mid 2016.

The No. 10/2009 Administrative Order gazetted on Monday approved the open tender for Macau’s fourth and last 3G public land mobile telecom network and related services license.

The SAR government is allowed to issue the last 3G operating license within two years, or before June 5 this year, after granting the first batch of the same licenses to CTM, Hutchison and China Telecom in 2007.

Currently, the 2G telecom network in Macau is based on three Global System for Mobile (GSM) communications standards and one Code Division Multiple Access (CDMA2000 1x) standard.

Meanwhile, the 3G telecom network adopts two Wideband Code Division Multiple Access (WCDMA) standards and one CDMA2000 1x EV-DO standard.

Deputy director of the Telecommunications Regulation Bureau (DSRT), Hoi Chi Leong, said in the press conference yesterday that the launch of the last 3G license was prompted by the increasing prevalence of the mobile service in Macau.

Hoi said there were about 230,000 mobile phone owners using the 3G service by the end of last year, representing a market share of 25 percent.

The number of 3G users also showed a penetration rate of more than 40 percent, based on the about half a million population in Macau, he added.

As well, in face of the new 10,000 customers signing up for the 3G service every month, the DSRT deputy director told the media the government believed “the local telecom industry has room for the fourth license.”

Hoi also said that the move would bring in “positive competition” to the market which could possibly lead to a reduction in service charges.

According to the No. 10/2009 Administrative Order, existing 3G license holders are prohibited from participating in the tender, and the first procedure to unseal proposals will be held at the DSRT office at 3pm on May 4.

If a local 2G service operator won the bid and acquired the 3G license, the administrative order states that the company’s 2G license will need to come to an end on July 8, 2012 “in order to ensure a healthy development of the mobile telecom market.”

The open tender, which also accepts proposals from outside Macau, will look at criteria such as bidders’ experience, financial status, technological capabilities, service charges as well as service commitments.

The DSRT deputy director said at least two companies from mainland China and Hong Kong had expressed interest in participating in Macau’s mobile telecom market, but he was not certain whether or not they would put it proposals at last.

However, he asserted that the SAR government was not obligated to issue the last 3G license, adding even if there was only one candidate for the tender, it would still need to meet all requirements in order to be granted the license.

The license will be issued for a validity period of eight years and can be renewed for no more than eight years subject to the market conditions.

The new 3G operator will be obligated to provide relevant telecom service within a year after the license is issued and finish construction of a comprehensive network system that covers the entire territory of Macau within 15 months after the commercial service is launched.

The deadline for handing in a tender proposal to the DSRT is at 5pm on April 30, 2009.

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