Sunday 20 May 2012

Contents of module

Mobile Interconnection with Tunnel Operators

Hong Kong Island is connected to the Kowloon peninsular and to the airport on the outer island of Lantau by road tunnels and the tunnels of the Mass Transit Railway (MTR). Hong Kong-wide cellular coverage therefore requires mobile access through the tunnels. In addition, Hong Kong has many densely crowded business, commercial and residential districts, full of high rise buildings, so good coverage also requires many cell sites with base stations located on these buildings. Land is relatively scarce and so land and property prices are high, and the owners of these properties (tunnels and buildings) charge the mobile operators high fees for the location of their base stations, and for interconnection with the telecommunication cables running through the tunnels.

For example, according to the TA’s StatementInterconnection between the Distributed Communication System of the MTR and the Mobile Network Operators within MTR Main Lines and Lantau Airport Railway, 27 January 2000 ‘access fees and rentals for cell sites generally constitute about one fifth of the Mobile Network Operator’s total operating expenses.’

The Statement goes on to examine the agreement with the MTR which requires the mobile operators ‘to make revenue sharing payments based upon 20 per cent of their call revenue.’

The mobile operators had called upon the TA to make a Determination as the to reasonableness of the MTR’s charges. These charges included: the Distributed Communication System ‘(DCS) “Access Fee”, “Communication Telecommunications Equipment Rooms (CTER) Fee”, Fibre Optic Access Fee”, “Maintenance Fee”, electricity charges, training fees and all other costs incurred by MTR.’

After a review the TA declined to make a Determination on the grounds that

  1. ‘Government should not interfere with contracts voluntarily entered into by the parties concerned’ unless there is some over-riding issue of public interest, but that
  2. ‘no submission has been made by the Mobile Network Operators as to how the customers would benefit from the proposed determination.’ Additionally,
  3. there was ‘no prima facie evidence to show that the MTR fees are excessive in the sense they are disproportionate when compared to other access fees and rentals accepted by Mobile Network Operators’, and
  4. the ‘Mobile Network Operators have not demonstrated whether the MTR fees are excessive to such an unreasonable level as to affect their ability to offer telecommunications services to the community in an economically efficient manner.’

These are stringent tests, and illustrate the important distinction between issues of revenue and profits sharing, which are essentially private commercial agreements, and issues of public interest, which in the case of Hong Kong are essentially consumer issues.