HKT warns admin fee for consumers to increase by 67% in 2021

Staff writer
telecomasia.net

HKT, the telecoms unit of the Richard Li-owned PCCW Group, warned that the administration fees charged by the telecoms industry to consumers are set to rise significantly by 2021, due to higher spectrum cost and “monopoly rents”.

HKT group managing director Alex Arena said the government’s focus on raising billions of dollars from higher mobile spectrum fees only threatens to further diminish the competitiveness of Hong Kong, South China Morning Post reports.

According to a consultation paper published in February, the government is expected to pocket at least HK$10.8 billion from its planned auction of part of the 900-MHz and 1800-MHz spectrum used by mobile network operators in 2021.

Arena said should spectrum costs rise as a result of the government's decision to auction off spectrum space currently used by the mobile operators, HKT would have no choice but to pass the higher costs on to customers,.

“If the government is using [higher spectrum costs] as a way of taxing the telecommunications industry, then we will simply pass this tax on to the consumer,” the executive said.

According to HKT, the administrative fee that is billed alongside a user’s service charge is expected to increase to more than HK$30 a month by 2021, up from the current HK$18.

That could amount to nearly HK$400 in additional fees a year paid by each mobile subscriber in Hong Kong, on top of their regular service charges, the incumbent said.

The administrative fee was first levied by mobile network service providers at HK$10 per customer each month in 2001. Since then, it has increased twice: to HK$12 in 2006 and HK$18 in 2014.

Arena said the fee was implemented by the industry to deal with “certain costs that we cannot control, which are imposed by monopolies”.

Those comprise the so-called spectrum utilization fee paid to the government; annual license fees collected by the Office of the Communications Authority (Ofca); fees to access, install and maintain networks throughout the MTR Corp’s rail network; and similar fees to operate networks in the various road tunnels in Hong Kong.

While the administrative fees charged by the mobile operator have stayed flat since 2014 , fees collected by monopolies such as the MTR and tunnel operators have gone up, HKT said.

“It is expected that the admin fee will increase significantly because the monopolists insist on extracting higher fees to subsidize their core businesses. On average, road tunnel costs and MTR costs have been increasing by 8% and 10% each year respectively,” the company said in a statement.

“The current admin fee does not cover HKT's full costs in paying the monopolists' fees and charges, and HKT has been slow to pass the full costs onto its customers... but inevitably HKT cannot be expected to continue to absorb these cost increases.”

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