Facilitating the Wireless Broadband Facilitating the Wireless Broadband

Connection of Hong KongConnection of Hong Kong

APRSC 2016

9 March 2016

Connection of Hong KongConnection of Hong Kong

Sanda Cheuk

Assistant Director (Regulatory)

Office of the Communications Authority

Hong Kong

Agenda

� Overview of Hong Kong’s mobile

telecommunications market

� Principles in spectrum management

� Approaches for meeting the booming demand � Approaches for meeting the booming demand

for wireless broadband services

2

Overview of Hong Kong’s

Mobile Telecommunications Market

3

Growth of Mobile Services

� No. of MNOs: 4

� No. of MVNOs: 23

� Total no. of mobile

subscribers:

16.7 million

(penetration at 228%)

4

� No. of 3G/4G

subscribers:

14.1 million

(penetration at 193%)

� No. of 2G/2.5G

subscribers:

2.6 million

Growth of Mobile Data Usage

� Sustained robust growth

in monthly mobile data

usage

Last 12 months +26%

Last 2 years +66%

Last 3 years +161%

5

Last 5 years +983%

Principles in Spectrum Management

6

Role of Communications Authority

in Spectrum Management

� The Communications Authority (CA) has a wide range

of powers under the Telecommunications Ordinance

for management of radio spectrum

� Promoting the efficient allocation and use of the radio

spectrum as a scarce public resource of Hong Kong

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spectrum as a scarce public resource of Hong Kong

� Power to assign, vary or withdraw frequencies

� Power to designate frequency bands subject to spectrum

utilisation fee (SUF)

� Due regard will be given to the Radio Spectrum Policy

Framework promulgated by the Government in 2007

Radio Spectrum Policy Framework (April 2007)

� Spectrum policy objectives

� Facilitate the most economically and socially efficient use of spectrum

with a view to attaining maximum benefit for the community

� Achieve technically efficient use of spectrum to facilitate the introduction

of advanced and innovative communications services and strengthen

Hong Kong’s position as a telecommunications and broadcasting hub

� Fulfil Hong Kong’s regional and international obligations relating to the

8

� Fulfil Hong Kong’s regional and international obligations relating to the

use of spectrum

� Strengthen Hong Kong’s strategic position as a world city and the gateway

between the Mainland of China and the world by facilitating the provision

of key services in Hong Kong

� Ensure that necessary spectrum is reserved for Government services

Radio Spectrum Policy Framework (April 2007)

� Guiding Principles for spectrum management

� Use of a market-based approach wherever the CA

considers that there are likely to be competing demands

for the spectrum, unless there are overriding public policy

reasons to do otherwise

� No legitimate expectation for any right of renewal or right

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� No legitimate expectation for any right of renewal or right

of first refusal of any spectrum assignment upon expiry

� Reasonable advance notice to be given for any withdrawal

or variation of spectrum assignment

� Spectrum Release Plan to be published on potential supply

of spectrum for competitive bidding or tendering

Approaches for meeting the booming demand

for wireless broadband services

(1) Timely Release of Radio Spectrum

10

(1) Timely Release of Radio Spectrum

Spectrum Release Mechanism� Spectrum Release Plan

� A 3-year spectrum release plan has been published every

year on a rolling basis

� Inform the industry about any spectrum available for

assignment through market based mechanism

� Launch of consultation for spectrum assignment upon

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Launch of consultation for spectrum assignment upon

application by the industry or at the initiative of the CA

� The CA aims to release available spectrum blocks as

soon as they are made available to enable the public to

enjoy the benefits of advanced wireless technologies as

early as possible

Potential Supply of New Spectrum

� Keep track of industry, regional and international

developments

� Active participation in the ITU’s World Radio-

communication Conference

� New spectrum for IMT services

� New allocation for government uses and commercial applications� New allocation for government uses and commercial applications

� Planning for the analogue switch-off (ASO)

� Government target of ASO for television broadcasting in 2020

� Frequency coordination with the Mainland required for benefit

from digital dividend

� Assessing the feasibility of sharing use the existing

spectrum (e.g. TV White Space)

12

(2) Effective Spectrum Assignment /

Re-assignment

13

Assignment of Spectrum

� In exercise of the CA’s power under the TO and having

regard to the Radio Spectrum Policy Framework and

international regulations and standards, spectrum

assignments are made through different approaches

for different frequency bands:

� Licensing through auction (e.g. public mobile services)� Licensing through auction (e.g. public mobile services)

� Licensing through administrative means (e.g. fixed links,

government uses)

� Licence-exempt allocation (e.g. WiFi, cordless phone)

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Assignment of Mobile Spectrum

� Spectrum for public mobile telecommunications services

� A total of 572 MHz of spectrum has been assigned (800/900 MHz,

1800 MHz, 1.9-2.2 GHz, 2.3 GHz and 2.5/2.6GHz bands)

� Likely no or limited new spectrum available before ASO

� Default market-based approach for both assignment of new

spectrum and re-assignment upon expiry of existing assignments

15

96.417%

233.641%

134.423% 107.6

19%

-

50

100

150

200

250

CMHK HKT Hutchison SmarTone

MHz

Distribution of Spectrum among MNOs

Re-assignment of 3G Spectrum� 120 MHz of spectrum in the 1.9 – 2.2 GHz band assigned through

auction in 2001 will expire in October 2016

� Objectives in spectrum re-assignment

Ensuring customer service continuity1

16

Encouragement of investment and promotion of innovative services

Promotion of effective competition

Efficient utilisation of spectrum

Ensuring customer service continuity

4

3

2

Re-assignment of 3G Spectrum� Full engagement with stakeholders

� Two rounds of public consultation from March 2012 to July 2013

� A consultancy study commissioned to study any impact on service quality

and consumers stemming from different spectrum re-assignment options

� Decision of the CA announced in November 2013� A hybrid administratively-assigned cum market-based approach adopted

to re-assign the 120 MHz of spectrum

� 3 years advance notice given to the incumbent 3G operators on the

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� 3 years advance notice given to the incumbent 3G operators on the

spectrum re-assignment arrangements

� Outcome of re-assignment� Number of 3G operators increased from 3 to 4

� Total of $7 billion of SUF to be collected from the spectrum assigned

through auction and offer of right of first refusal

� 2x15 MHz of spectrum will change hand

Re-assignment of 2G Spectrum

� 198.6 MHz of spectrum in the 900 MHz and 1800 MHz

bands will expire in 2020/21

(45 days) (8 days)

29 Sep 2021

Hutchison SmarTone HKT

19 Nov 2020 3 Jan 2021 11 Jan 2021

900 MHz 1800 MHz

All 4 MNOs

� Competing demands likely exist for the spectrum

� market-based approach should be adopted

� Consideration of any overriding public policy reasons

(e.g. continuity of 2G voice services) for not adopting the

market-based approach

� Same four spectrum re-assignment objectives

18

Re-assignment of 2G Spectrum

� CA and Secretary for Commerce and Economic Development

launched first stage public consultation on 3 February 2016

on approach of re-assignment and setting of SUF

� Proposed options currently under consultation

� Option 1 – full-fledged administratively-assigned approach

� Option 2 – full-fledged market-based approach� Option 2 – full-fledged market-based approach

� Option 3 – hybrid approach

� Consultation to close on 18 April 2016

� Aim to make a decision around November 2017 (i.e. three

years before expiry of existing assignments)

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(3) Promote Efficient Spectrum Utilisation

20

Spectrum Refarming

� Technology neutral principle� Spectrum generally assigned on technology neutral basis

� MNOs may use any widely recognised technology for

service provisioning with the assigned spectrum

� Spectrum can be refarmed without the need for

regulatory approvalregulatory approval

� A large proportion of the 2G spectrum has already been

refarmed for the provision of 3G/4G services

21

Spectrum Refarming

A large proportion of the 2G

spectrum has been re-farmed

to provide 3G/4G services

22

Spectrum Swapping

� Building up of contiguous spectrum� Reduce adjacent channel interference

� Improve spectral efficiency

� Increase network capacity

� Two precedents of frequency swaps in recent years� Two precedents of frequency swaps in recent years� November 2012: 1800 MHz band

� January 2016: 2.5/2.6 GHz band

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Spectrum Swapping

Original Frequency Assignment

Frequency Assignment after the Swap

Swap in 1800 MHz Band

OtherMNOs

Other MNOs SM

C

CM

HK

CM

HK

CM

HK

CM

HK

CM

HKOther

MNOsOther MNOsS

MC

SM

C

SM

C

CM

HK

CM

HK

CM

HK

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Frequency Assignment after the Swap

HKT HKT HKT CMHKCMHKOther MNOs

HKT HKT CMHKCMHKOther MNOs

Original Frequency Assignment

Swap in 2.5/2.6 GHz Band

Mobile Data Offload through Public Wi-Fi� Light-handed licensing and regulatory approach for public

WiFi services� Operate on unlicensed spectrum in the 2.4 GHz and 5 GHz bands

� 5 carrier licensees authorised to provide municipal WiFi services

� 42 class licensees registered to provide indoor WiFi services

� No restriction for deployment of seamless mobile-WiFi handover

� Extensive coverage of public Wi-Fi service� Extensive coverage of public Wi-Fi service� 39,750 registered Wi-Fi access points

MTR stations, Airport Express stations and trains, buses,

ferries, etc.

Offices, shopping malls, coffee shops, restaurants,

convenient stores, etc.

Public hospitals, public libraries, parks, tourist spots, etc.

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(4) Facilitate Implementation of Wireless

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(4) Facilitate Implementation of Wireless

Broadband Infrastructure

Deployment of Small Cells

� Variety of configurations� Femto cells

� Pico / micro cells

� Range from 10m to several hundred metres

� Advantages of small cells� Advantages of small cells� Boost mobile network capacity by cell-splitting and

spectrum re-use

� Bring users closer to base stations and improve signal

reception

� Easier to find installation sites and more cost effective

27

Deployment of Small Cells

Possible Locations for Installation

� Payphone Kiosks� Lamp Posts

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� Bus Stops / Shelters � Shops on the Street

Assignment of Backhaul Links

� OFCA facilitates extension of mobile broadband coverage

by use of microwave backhaul links for� Connection of small cells to the core network

� Connection between base stations / hill-top sites

� More efficient and cost effective mobile broadband � More efficient and cost effective mobile broadband

coverage in remote and rural areas

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Mobile Network Sharing

� Mobile network sharing is permitted to –� Lower the cost of building and operating mobile infrastructure

� Expedite rollout of mobile networks

� Avoid over-construction of mobile base stations

� Make more efficient use of sites

� Enable the provision of higher speed data services

� Existing forms of mobile network sharing in Hong Kong� Existing forms of mobile network sharing in Hong Kong� Antenna sharing

� Site and equipment sharing

� Capacity leasing

� New forms of mobile network sharing (e.g. carrier

aggregation) may be explored subject to compliance with

licence obligations

30

Example of Mobile Network Sharing

� Sharing of all and part of the Radio Access Network (RAN) equipment or facilities

� Each mobile network operator maintains its operator maintains its own separate logical RAN using its own assigned spectrum

31

“Our vision is that Hong Kong has the world-class communicationsservices to meet the challenges of the information age” (CommunicationsAuthority’s Vision Statement)

Thank YouThank You