Hong Kong Set for 2020 5G Launch After $128M Auction

5G services could start in Hong Kong as early as the middle of 2020 after each of the city's four operators acquired slices of the key 3.5GHz spectrum on Monday.

The sale, which yielded HK$1.006 billion ($128.2 million), was the first of a three-part auction of 380MHz of 5G frequencies.

Regulator Ofca will sell off the 3.3GHz and 4.9GHz frequencies -- also mainland China bands -- in the coming weeks.

HKT, which acquired 40MHz of spectrum for HK$252 million ($32.1 million), said it expected to roll out services in Q2 of 2020.

It said it welcomed Ofca's "modest" 5G spectrum fees -- a turnaround from its scorching attack last year in which it accused the government of "drip feeding spectrum into the market" to maximize auction prices.

"We are pleased that, as a result of rational biddings, HKT is able to obtain 50MHz of contiguous spectrum at a price that is beneficial to the industry as well as the mobile users," HKT said in a statement.

The spectrum fees were "reasonable," offering incentives for the industry to invest in 5G development and promotion, it added.

The operator said it "looks forward to offering high quality 5G services in the second quarter of 2020 when the necessary ecosystem is in place."

China Mobile HK was the biggest winner in Monday's auction, picking up 60MHz for HK$300 million ($38.2 million).

SmarTone acquired 40MHz for HK$252 million ($35.1 million) and Hutchison Telecom gained 40MHz for HK$202 million ($25.8 million). The spectrum rights will run for 15 years from April 1.

All operators have conducted limited 5G trials to date. CMHK has installed cellsites at several of its stores, while SmarTone ran a field trial aggregating 3.5GHz and 28GHz bands simultaneously.

SmarTone CEO Anna Yip said 5G service would begin "soon after" the spectrum becomes available.

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As with numerous other regulators, the allocation of 5G spectrum has marked a shift for Ofca from the auction-only approach it had previously deployed.

In March it assigned 400MHz in the 26GHz and 28GHz spectrum bands to HKT, China Mobile HK and SmarTone without any charge.

Ofca has another 2900MHz of millimeter wave spectrum unclaimed so it is offering it on a shared basis for private networking at locations such as campuses and technology parks.

For the remaining frequencies, the 4.9GHz and 3.3GHz, the regulator has cut the spectrum utilization fees.

All four operators have registered to take part in the auctions, with 80MHz up for grabs at 4.9GHz and 100MHz at 3.3GHz.

— Robert Clark, contributing editor, special to Light Reading