Deconstructing 3G and reconstructing telecoms

Abstract After heated debate in Hong Kong, the Government and the regulator adopted suggestions (May 2000) 2 to assign third generation (3G) mobile telecommunications licences by royalty auction to avoid the use of upfront cash auctions as in Europe, now widely regarded as a disaster. Uncertainty has replaced the former certainties of the 2G world, an issue that raises fundamental questions about what exactly is 3G, while rendering much business forecasting futile. This paper examines the debacle, casts a critical eye over the use of auctions, and summarizes the Hong Kong debate and the business modelling that accompanied it. It concludes with a warning on uncertainty.