Hong Kong Mobile Network Mergers Gain Conditional Approval
Published on: 8th May 2014
Hong Kong Telecom's planned purchase of rival mobile network operator, CSL has been granted conditional approval by the Hong Kong Communications Authority (CA).
Last December, Australia's Telstra announced that it would sell CSL to HKT for USD2.43 billion.
The Authority ruled that in its hearings on the matter, HKT had failed to convince it that the merger of the two companies would be beneficial to the general public, and Although it has now decided to approve the merger, it is with conditions attached.
To complete the deal, the two companies will be required to divest a total of 29.6 MHz of the 3G Spectrum, by not seeking to renew the assignment of and not bidding for additional spectrum that is due to be auctioned in October 2016.
As the merged networks are expected to close overlapping base stations, they will be required to notify the regulator at least 90 days ahead of any closure, for a period of five years.
They will also be required to honour existing MVNO agreements for at least the next three years.
In a statement, the regulator said that "This will reduce the spectrum concentration on the part of HKT and CSL combined following expiry of the 3G Spectrum assignment in October 2016. The acquisition of the divested spectrum by competitors of the Merged Entity will equip them with sufficient network capacity to enable them to compete effectively with the Merged Entity.