ENG-2009 — Page 423

Communications, the Media and Information Technology | 351

and services. Following the complete withdrawal of the Type II interconnection policy1 in June 2008, the number of consumers who have at least two choices of operators has continued to grow. By March 2009, 85 per cent and 66 per cent of households in Hong Kong were able to enjoy a choice of at least two or three self- built fixed networks respectively.

By December 2009, the city's telephone density was 101.8 fixed telephone lines per 100 household, one of the highest in the world.

Triple Play and Quadruple Play Services

The rapid development of advanced broadband technologies and the increasing convergence between telecommunications and broadcasting have created opportunities for telecommunications operators to offer triple play and quadruple play products, bundling fixed and mobile telephony services, broadband internet access (wireline and Wi-Fi) and IPTV services at attractive rates.

Fixed Mobile Convergence

With a dynamic market and technological developments, the distinction between fixed and mobile networks and services is becoming increasingly blurred. To pave the way for the emergent trend of fixed-mobile convergence, the Government has implemented a series of important regulatory measures.

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On August 1, 2008, a new Unified Carrier Licence was introduced as a single licensing vehicle for all types of carrier services fixed, mobile or fixed-mobile converged services under harmonised licensing conditions and licence fees. Existing carrier licensees can convert their licences to the new Unified Carrier Licence before expiry on a voluntary basis. At the end of December 2009, a total of 20 Unified Carrier Licences had been issued. Among these, six were issued to new applicants while the rest were issued to replace existing Fixed or Mobile Carrier Licences.

Furthermore, the TA issued a statement in April 2007 to set out his decision to withdraw the regulatory guidance on the asymmetric Fixed Mobile Interconnection Charge (FMIC) arrangement, which was based on a 'Mobile Party's Network Pay' (MPNP) approach2. To ensure smooth withdrawal of the regulatory guidance, the industry was given a two-year transitional period, which ended in April 2009. Following the withdrawal of the regulatory guidance, FMIC arrangements are now subject to commercial negotiations.

1 Type II interconnection policy, more commonly referred to as 'local unbundled loop policy', is a regulatory tool widely deployed around the world. First introduced to Hong Kong in July 1995, it required the incumbent fixed network operator to open up its copper-based customer access network to new entrants. After a comprehensive review, the Government announced in July. 2004 that the regulation for mandatory Type II interconnection at telephone exchange level would be gradually withdrawn on a per building basis.

2 Under this MPNP arrangement, which had been in place since 1980s, the mobile operator had been the one to pay the FMIC regardless of whether the calls were made by fixed or mobile

users.