Six Applicants for Four 4G Licences

Two prospective new entrants submitted applications to compete with Macau’s four incumbent mobile operators for the four 4G licences on offer by yesterday’s deadline. China Mobile Hong Kong and start-up telecoms venture Yu Hang are the two new bidders alongside Companhia de Telecomunicacoes de Macau (CTM), China Telecom Macau, Hutchison Macau (3) and SmarTone Macau. As previously, four concessions with eight-year duration will become valid early next year, following the tender launched in September by Macau’s Bureau of Telecommunications Regulation (Direccao dos Servicos de Regulacao de Telecomunicacoes, DSRT), which is opening the bids today; licence winners will be expected to launch 4G LTE (FDD and/or TDD) mobile broadband services covering 50% of Macanese territory by the end of 2015, rising to 100% in 2016.

In a report accompanying the bidding announcement, China Telecom Macau – the territory’s sole CDMA-based mobile provider – told Macau Business Daily that the prospects for short-term return on start-up 4G network investment in Macau are ‘not very promising’ as the considerable cost of deploying the 4G network cannot be readily passed on to consumers as price competition will remain keen. Vice general manager of China Telecom Macau, Song Tong, admitted to the paper that he did not expect significant revenue growth ‘anytime soon’ as market competition is ‘fierce’, but on the other hand noted that his company was ‘eyeing the tremendous potential of the [LTE] technology and the possibility that it could bring in a large increase in the number of users,’ adding that ‘we have to evolve with the market’. The China Telecom representative also highlighted the fact that business risk would be lowered via infrastructure sharing agreements with fellow 4G licensees, whilst the expanding fibre transmission infrastructure of Macau’s fixed network newcomer MTel – an alternative to former monopoly CTM – may also help reduce rollout/operating costs.

CTM previously stated that it was already technically prepared to launch 4G LTE services as soon as a licence is issued, whilst anticipating that LTE usage will raise monthly average revenue per user (ARPU), in contrast to China Telecom’s expectations.

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