ITEM: Hong Kong’s independent Communications Authority has released its plan to make more spectrum available for 5G use, with a twist: operators can use mmWave 5G spectrum for free. To a point.
Last Thursday, the CA kickstarted a public consultation on its plan to assign the entire 26 GHz (24.25 – 27.5 GHz) and 28 GHz (27.5 – 28.35 GHz) bands for 5G services “on a co-primary basis with fixed service and fixed satellite service (Earth-to-space) with effect from April 1, 2019, by which time the existing assignments in the 26 GHz band will be vacated.”
The CA proposes to issue 4,100-MHz of spectrum in the 26-GHz and 28-GHz bands. Out of that, 3,300 MHz to 3,700 MHz of spectrum will be assigned for “large scale public 5G services”, with each operator receiving a maximum of 800 MHz.
The remaining 400 to 800 MHz of mmWave spectrum will be reserved for shared usage for 5G deployments in specific geographical locations such as university campuses, industrial estates, technology parks or the airport. For these allocations, operators are limited to 400 MHz of spectrum.
Meanwhile, the CA also proposed to release an additional supply of 200 MHz of spectrum in the 4.9 GHz band and the 3.3 GHz band, which can be used for 5G or lower-G services (although the latter band would be limited to indoor coverage).
All up, according to the CA, the above assignments – combined with the 200 MHz of 3.5 GHz spectrum announced earlier this year – add up to around 4,500 MHz worth of new spectrum for 5G usage, which amounts to eight times the existing 552 MHz that cellcos have now, a CA spokesperson said.
(Last month, the CA also enabled operators to share 580 MHz of spectrum in the 5-GHz band for as license assisted access (LAA) deployments – so there’s also that.)
Whether cellcos are happy with the proposed plan remains to be seen. (Telcos and everyone else have until August 22 to file their comments with the CA.) Incumbent telco HKT in particular has spent a good deal of time and energy savaging the CA over its sluggish timetable for releasing 5G spectrum regardless of the amount it will eventually make available. The CA intends to start accepting applications for 5G spectrum by the end of the year so that it can issue the spectrum by the start of April 2019 to enable commercial launches in 2020, but HKT insisted in its most recent policy paper that there’s no way any cellco in Hong Kong will be able to realistically launch 5G services (at least with sufficient coverage) until at least 2022 under the current spectrum timetable.
That said, one potentially welcome move by the CA is its proposal to conditionally waive the spectrum utilization fee (SUF) for the mmWave bands.
Under that proposal, which has been approved by the Commerce and Economic Development Bureau (CEDB), operators would not have to pay any SUF as long as less than 75% of the bands are occupied. Once utilization exceeds that threshold, cellcos with large-scale 5G deployments would have to pay HK$21,600 ($2,765) per MHz annually, while those offering geography-specific 5G services would have to pay HK$1,080 per MHz annually.
The rationale for waiving the SUF for mmWave bands is that scarcity isn’t an issue, reports South China Morning Post:
Secretary for Commerce and Economic Development Edward Yau Tang-wah said it was appropriate not to call an open auction for spectrum given its “abundant supply”.
“That means it will greatly reduce the cost and also shorten the time involved,” Yau said, referring to the roll-out of 5G networks by service providers.
However, the CA downplayed the lower-cost issue, noting that the SUF typically only accounts for 3-4% of operational costs. Also, cellcos still have to pay SUFs for all the other spectrum they currently use, as well as all new sub-6 GHz spectrum.