OFCA said to probe HKT's CSL purchase

Dylan Bushell-Embling
03 Jan 2014
00:00

Richard Li's HKT risks having its planned $2.4 billion buyout of Hong Kong mobile operator CSL shot down by regulators.

Hong Kong regulator OFCA has hired a consultant to determine whether the proposed deal would give Li too much power in the local telecom market, a government source toldthe South China Morning Post.

The Authority's review of the complex deal is likely to take more than three months, the source is quoted as saying, meaning HKT is unlikely to meet its goal of having the acquisition completed by March.

The proposed acquisition would give a combined HKT-CSL 31% of the mobile market by subscriber share and 38.3% by spectrum share.

Due to Li's father Li Ka-shing's ownership of Hutchison Whampoa, The Post report meanwhile cites industry experts as estimating that the transaction would meanwhile give the Li family control over more than 50% of Hong Kong's mobile market and 70% of the fixed line market.

HKT announced the planned purchase of CSL from current owner Telstra in late December. At the time, the company said that while it did not believe there were significant competition concerns involved, it volunteered to make several concessions aimed at securing approval.

These included returning 2 x 15 MHz of 3G spectrum once current 3G licenses expire in 2016 – more than the 2 x 10 MHz due to be returned under the regulator's proposal – and agreeing not to participate in the planned auction to reallocate the spectrum.

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