Dual-Band Operation and Domestic Roaming for Public Mobile ...

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Dual-Band Operation and Domestic Roaming for Public Mobile ...

  1. 1. Dual-Band Operation and Domestic Roaming for Public Mobile Radiotelephone Services in the 800/900 MHz Band and Personal Communications Services in the 1.8 GHz Band Statement by the Telecommunications Authority, Hong Kong 28 August 1998 Introduction On 21 May 1998, the Telecommunications Authority (TA) issued a consultation paper entitled "Consultation Paper on Dual Band Operation and Domestic Roaming for Public Mobile Radiotelephone Services (PMRS) in the 800/900 MHz band and the Personal Communications Services (PCS) in the 1.8 GHz band" (hereinafter called the “Consultation Paper”). The objective of the consultation is to seek the views from the industry on issues related to dual band services and domestic roaming between GSM 900 networks and GSM 1800 networks. 2. By the end of the consultation, the TA received 9 submissions from mobile operators and interested parties. A summary of the views and comments received is in the Annex. This paper gives the considered views and decisions of the TA on the introduction of dual-band services and domestic roaming between GSM 900 and GSM 1800 networks. How Should Dual-band Services be Regulated? 3. All commenters are generally supportive of the TA’s view that the introduction of dual band services is to the benefits of the consumers. Many of them highlight a number of advantages of dual band operation. The introduction of dual band services is a natural evolution of technological advancement which enables greater cost-efficiencies, improves productivity, allows service differentiation, provides better grades of service and maximizes available spectral resource to improve service quality and lower the price. It also allows consumers to have wider choice on operators and broader range of innovative services. 4. As regards views on how to regulate dual band services, the PMRS/PCS operators consider that the introduction of the dual-band services is a commercial decision and it should be left to market forces. There is no need for the TA to impose any regulatory measures such as setting a moratorium to restrict operators to deploy better and more efficient technology which will ultimately bring significant benefits to consumers. Shun Hung Kai Properties 1
  2. 2. Ltd. comments that the TA should not create any regulatory barriers to prevent operators from improving efficiency and capacity through better usage of resources. Shun Hing Technologies Co. Ltd. suggests that the TA needs not be involved in the regulation and let the operators settle among themselves. 5. The standalone PCS operators consider that the introduction of dual band services affords the PMRS/PCS operators a network that has substantially more spectrum than is available for the standalone PCS operators. The advantages of this additional spectrum include better trunking efficiency and the ability to increase service quality, through co-location and targeting current capacity hot-spots, at a faster rate than is feasible for the standalone PCS operators. To ensure a level playing field, they propose that the TA should introduce a one-year moratorium for the use of dual band services and to ensure that all the conditions of the PMRS and PCS licences are fully upheld. They also request the TA to allocate, or assure that additional spectrum is allocated, to each standalone PCS operator and take an active role in ensuring that all operators are allowed to gain access to critical sites. 6. As explained in the Consultation Paper, the TA considers that dual-band technology enables PMRS/PCS operators to use the spectrum resources more efficiently and to improve network coverage and service quality. By sharing the resources between the GSM 900 and GSM 1800 networks, the PMRS/PCS operators could reduce both the network operating costs and administrative costs in the long run. Thus, the deployment of this new and improved technology will give consumers significant benefits in terms of competitive pricing, improved network coverage, enhanced quality of service and other service innovation. Concerning the argument that the PMRS/PCS operators will have significant advantages over the standalone PCS operators in terms of coverage, the TA has explained in the Consultation Paper that, initially, a network with dual band services would inevitably have better coverage compared with a standalone PCS, but the difference would be diminishing over time and would in around one year’s time become insignificant to a large proportion of customers. In fact, two standalone operators point out in their submissions that their PCS networks would become fully competitive by mid- 1999. This affirms the TA’s view that the difference in network coverage between GSM 900 and GSM 1800 networks would diminish in around one year’s time. Furthermore, with the introduction of mobile number portability in early 1999, the TA believes that it would help, to a certain extent, to increase competition and ensure a level playing field for the operators. 7. In line with the light-handed regulation and technology neutral approach adopted in regulating mobile services, the TA maintains his view that there is no need to impose any special regulatory restriction on dual-band operation. The development of dual-band services is hinged on technological development and the timing of its introduction should be left to the market forces. 2
  3. 3. Imposing a moratorium on the launch of dual-band service will unnecessarily interfere with commercial operation and unduly impede the technological development of mobile services in Hong Kong. This would not serve the interest of the public and the mobile industry. 8. In their submissions, the standalone PCS operators request for additional spectrum for equalizing the imbalance between the PMRS/PCS and standalone operators. The TA considers that there is currently spare PCS spectrum in the 1.8 GHz band and any PCS operators including the standalone PCS operators could apply for use of the spare spectrum at any time if they meet the established criteria such as the efficient use of spectrum and traffic demand. Spectrum requirements for new services that depend on the availability of more spectrum would also be considered by the TA. If the standalone PCS operators have justifications to prove that their competitive position would be eroded after the introduction of dual band services or they have difficulties in planning their network coverage or capacity due to the insufficiency of spectrum, they may apply to the TA, together with their justifications, for the allocation of additional spectrum. 9. After consideration of the submitted views and comments, the TA reaffirms his position that the introduction of dual band services should be permitted as long as such services are introduced in a manner that fully complies with the licensing conditions. 10. The introduction of dual band services requires the allocation of the same Mobile Network Code (MNC) to networks in the 800/900 MHz band and 1.8 GHz band operated by the same operator. As the policy of permitting dual band operation without restrictions has been adopted, the TA sees no reason not to approve application for using the same MNC for networks in the different bands to facilitate dual band services. 11. The TA re-iterates that the PMRS/PCS operators will not be able to evade the licence commitments by providing the dual-band services. The PMRS/PCS operators are required to fulfill their milestone commitments under the PCS licences in full by implementing the required PCS facilities, not to be replaced by PMRS facilities. In order to help mobile operators to expedite the development of their network coverage, the TA will continue to provide assistance to all mobile operators in accessing confined areas such as shopping malls and tunnels, and to share use bottleneck facilities on an equitable basis, such as the establishment of common antenna facilities in Country Parks. 3
  4. 4. Domestic Roaming 12. In the Consultation Paper, the TA has proposed that domestic roaming could enable the standalone PCS operators to make use of the well- established GSM 900 network facilities so as to enhance their PCS network coverage. The TA is of the view that domestic roaming between GSM 900 networks and GSM 1800 networks is useful in promoting fair and effective competition between PMRS/PCS operators and standalone PCS operators. However the submitters do not seem to support the idea of domestic roaming. 13. Two standalone PCS operators are of the view that domestic roaming is not the best options they would strive for owing to a number of shortcomings. Seamless call handover would not be possible which would be perceived by subscribers as a degradation of service quality. The service quality will be dependent on the roaming network and it is hard to predict and control. Operators will need to make substantial investment in modifying their billing and administrative and supporting systems in order to incorporate roaming charges in to the customers bills and to settle the charges amongst operators. The service offered by domestic roaming is restricted to basic voice service only, and other value-added and proprietary services offered by the home mobile network could not be retained. 14. The PMRS/PCS operators object to the imposition of mandatory domestic roaming. They consider that PMRS/PCS operators would face problem in planning their GSM 900 network capacity as the increased traffic arising from the PCS roaming subscribers could not be predicted. As a result, the quality of service offered to both their own GSM subscribers and PCS roaming subscribers would be compromised. If the market demand warrants the use of domestic roaming, mobile operators would have the commercial incentive to enter into reciprocal domestic roaming agreements amongst themselves. 15. The TA is aware that there are some inherent deficiencies in domestic roaming and the service quality achievable by this functionality could not match with that offered by dual-band services. Domestic roaming might also increase the operating and administrative costs of network operators. However, as pointed out in the Consultative Paper, domestic roaming between networks operated by different operators would be useful in overcoming some existing coverage problems. For example, coverage for one network may not be available within certain indoor areas or at certain locations in the Country Parks. It may not be possible, due to physical, economical or other constraints, to extend the coverage of all networks to all areas. Domestic roaming between networks operating in the same band, or different bands, would help improve customers which would otherwise be deficient in coverage. 4
  5. 5. 16. Two PMRS/PCS operators are of the view that domestic roaming does not constitute “interconnection” of telecommunications systems or services because roaming will not require the passing of calls between the networks. Roaming simply involves a signalling interface between the networks. They are of the view that roaming does not fall within the jurisdiction of the TA under section 36A of the Telecommunication Ordinance. 17. The TA does not agree with the narrow interpretation of section 36A as suggested by the two PMRS/PCS operators. According to section 36A(3)(a), the type of interconnection referred to in this section is an arrangement for interconnection to and between telecommunication systems or services licensed, or exempted from licensing, under the Telecommunication Ordinance. The policy objective of section 36A is to prevent telecommunication systems or services from being operated as isolated services. The interconnection is to allow customers of one system or service to have access to customers connected to, or services provided by, another system or service. Domestic roaming is to enable customers of one mobile network to gain access to the services provided by another mobile network. There are at least two types of interconnection involved in a domestic roaming arrangement. The first is interconnection between the mobile networks to enable customer verification data to pass. The second is interconnection through circuits established by radio between the customer’s mobile station (which itself is a telecommunication system exempted from licensing under the Telecommunication Ordinance) and mobile network providing the roaming service. 18. Notwithstanding the TA’s belief that powers exist under section 36A of the Telecommunication Ordinance for him to determine the terms and conditions of the interconnection arrangement to implement domestic roaming, the TA notes that even the standalone PCS operators are not fully supportive of the domestic roaming arrangement. Taking into consideration the views from the industry and the fact that some standalone PCS operators have almost completed their network rollouts, the provision of domestic roaming will have marginal effect on improving their PCS network coverage, the TA decides that he would not mandate the provision of domestic roaming at this point in time. The provision of domestic roaming will be subject to bilateral agreement between mobile operators. If mobile operators cannot agree on the terms and conditions of interconnection and charging arrangements for domestic roaming agreement, the TA will make a determination under section 36(A) of the Telecommunication Ordinance. 5
  6. 6. Conclusion 19. The TA concludes that the introduction of dual band services by mobile network operators should be allowed as long as they would fully comply with the licence conditions. The TA would not mandate the provision of domestic roaming, but he would consider making a determination of the terms and conditions for domestic roaming under section 36A of the Telecommunication Ordinance if he receives requests from mobile network operators for him to do so. 20. Any enquiries on this Statement should be addressed to the Telecommunications Authority at the following address:- Office of the Telecommunications Authority 29/F, Wu Chung House 213, Queen’s Road East Wanchai Hong Kong [Attn: Senior Telecommunications Engineer (Technical Support 2) Telephone no. 2961 6778 Fax no. 2803 5112] Office of the Telecommunications Authority 28 August 1998 6
  7. 7. Annex Summary of Comments and Views from Respondents on Consultation Paper - Dual Band Operation and Domestic Roaming for PMRS in the 800/900 MHz Band and PCS in the 1.8 GHz Band The Office of the Telecommunications Authority (OFTA) received altogether 9 submissions from the industry and interested parties on the consultation paper. Their major views and comments are summarised in the tables below : How should dual band services be regulated in Hong Kong? Hong Kong Telecom CSL CSL supports the TA's preliminary view that the introduction Ltd. (CSL) of dual band services should be permitted. It considers that a “temporary moratorium” has no sustainable merits and it not in the public interest to delay the offer of dual band services simply to favour particular mobile operators by protecting them from the dynamic effects of competition through innovation. CSL is of the view that dual band service aims to ease the capacity issues of the GSM 900 network, the enhancement of the incumbent networks should not be considered as a threat nor disadvantage to the standalone PCS operators. Consumer benefit and public interest should far outweigh the alleged “unfair advantages”. In addition, there will be a sufficient lead time between now and full commercial ubiquity of dual band handsets by which time the coverage of the standalone PCS networks will have been significantly improved if each of the PCS operators chooses to commit sufficient effort to the roll-out of its network. CSL agrees with the TA that there should be no moratorium, either temporary or permanent, imposed on the provision of dual band services. Hutchison Hutchison is encouraged to note the TA's support for the Telecommunications provision of a dual band services and the TA's (Hong Kong) Ltd. acknowledgment that such services are in the interests of the (Hutchison) consumer. Dual band services should be made available as soon as possible. To hold up the launch of dual band services and thus deprive consumers of the benefit of the technological advance that such services offer would be grossly unfair. Any question of a moratorium, temporary or otherwise, is both totally unacceptable and beyond the power of the TA. Dual band services should simply require compliance with 7
  8. 8. both the relevant operators’ PCS and GSM licences and no new regulatory approval is required for dual band services. Mandarin SUNDAY agrees that the introduction of dual band services Communications Ltd. is to the advantage of the Hong Kong consumers. However (SUNDAY) the advantages gained by PMRS/PCS operators over the standalone PCS operators by the immediate introduction of dual band networks, if left unaccounted for, only serve to hinder SUNDAY’s ability to be competitive. The timing of the introduction of dual band services is therefore of importance to the commercial viability of the standalone PCS operators. The introduction of dual band network affords the PMRS/PCS operators a network that has substantially more spectrum than is available for the standalone PCS operators. The advantages of this additional spectrum for the efficiency of the network are well established. Deployment efficiencies are advantageous to the PMRS/PCS operators who will have the ability to increase service quality, through collocation and targeting current capacity hot-spots, at a faster rate that is feasible for the standalone PCS operators. SUNDAY therefore proposes that OFTA - • introduces a one year moratorium of the use of dual band networks and services. • ensures that all the conditions of all licences are fully upheld • allocates additional spectrum to each standalone PCS operator • takes an active role in ensuring that all operators are allowed access to critical sites. New World PCS Ltd. NWPCS proposes that dual band operation should be allowed (NWPCS) only when standalone PCS operators are given sufficient time to negotiate for and conclude roaming agreement with GSM operators. Only when integrated and standalone PCS operators are able to implement domestic roaming, should the TA mandate commencement of dual band implementation. Peoples Telephone Co. Peoples Phone accepts and supports the view that the Ltd. (Peoples Phone) introduction of dual band integration be allowed. However OFTA should ensure that any benefits gained by the consumer 8
  9. 9. through allowing dual band integration are not reduced or minimised by a reduction in the competitive environment. Shun Hing Technologies Shun Hing welcomes the proposal of permitting dual band Company Ltd. services in Hong Kong and has the suggestion that OFTA (Shun Hing) needs not be involved in the regulation and let the services operators settle among themselves. SmarTone Mobile SmarTone agrees with the TA that dual band services should Communications Ltd. be permitted and urges the TA allow immediate (SmarTone) commencement of these services. SmarTone comments that dual band technology enables greater cost-efficiencies, improves productivity, allows service differentiation, provides better grades of service, maximise available spectral resource to improve service quality and lower the price. Considering that dual band services are part of the natural technological evolution for service enhancement and bringing greater benefits to consumers as well as continually contributing to the eminence of telecommunications in Hong Kong, SmarTone recommends that dual band services be permitted immediately. Sun Hung Kai Properties SHK comments that given the tremendous benefits of dual Ltd. (SHK) band operation to consumers on enhanced network coverage, enhanced quality of service, wider choice on operators and broader range of innovative services, the imminence of the commercial availability of dual mode handsets as well as the rapid development of technology, the TA should allow dual band operation as soon as possible. Dual band operation would enable PMRS/PCS operators to operate more efficiently and expand their capacity by improving the trunking efficiency of GSM 900 and GSM 1800 frequencies to achieve more cost efficient operations. Mr. Alex Tsui (Interested Mr. Tsui agrees on the OFTA's view of GSM 900/DCS 1800 personnel) dual-band operation. Domestic Roaming Issues Hong Kong Telecom CSL CSL does not support the introduction of mandatory Ltd. domestic roaming. The issue of domestic roaming should be (CSL) dealt with by commercial arrangement if it proves technically 9
  10. 10. feasible and commercially viable between mobile operators. CSL considers that any domestic intercarrier roaming service provider in Hong Kong would experience severe difficulties to maintain its service quality, both in the provision of network services to its own customers, and in the provision of network services to its roaming customers, due to the major technical difficulties in providing overlapping coverage within a dense area such as Hong Kong. Mandating domestic roaming would immediately create the potential for major and unpredictable network congestion. In terms of the complexity of the issue, the effort and additional capital investment spent by the domestic roaming service provider in various aspects would result in long lead- time and high provision cost. CSL does not consider that domestic roaming could effectively alleviate the problem of indoor and other coverage constraints currently faced by the industry. There are many unresolved issues including service quality, network identity, network capacity, call drop due to non-seamless handover, re-registration at home network, etc. which make this arrangement unattractive to mobile operators for dealing with constrained coverage issues. To promote competition in the market, CSL considers that the standalone PCS operators should be encouraged to build their own network rather than using others to provide the service. By mandating the imposition of domestic intercarrier roaming OFTA would reduce the incentives for the standalone PCS operators to complete any significant network rollout in areas other than those high teledensity areas that would allow them to engage in “cream skimming”. CSL submits that a domestic intercarrier roaming service is not the interconnection of telecommunications systems or services because roaming will not require the passing of calls between the networks. Roaming, both internationally and domestically, simply involves a signalling interface between the networks. Accordingly, CSL considers that under the current legislation and regulatory regime there is no power vested in the TA to mandate domestic intercarrier roaming on the PRS licensees. Hutichison Hutchison disagrees with TA's intention of involving himself Telecommunications in mandating domestic roaming and setting the relevant (Hong Kong) Ltd. charges. These matters should be left to commercial (Hutchison) arrangements and beyond the power of the TA to mandate. 10
  11. 11. Hutchison considers that domestic roaming would result in PCS customers experiencing service quality difficulties and limitation problems and existing GSM customers being subjected to deterioration of service quality. The lack of seamless roaming as between networks with different mobile network codes is a serious problem which will adversely impact service quality and thus the reputation of the industry in general. A PCS subscriber roaming onto a GSM network will remain on the relevant GSM network until that GSM coverage is lost or manual re-selection of PCS coverage is made. This will inevitably result in PCS subscribers making calls via GSM roaming arrangements which could have been made on their home PCS network. This will give rise to unexpectedly high bills arising out of the relevant roaming charges and inevitable customer complaints. Domestic roaming service would inevitably be restricted to basic voice services and would not allow access to normal value added services. GSM networks are already operating at near full capacity and cannot accommodate additional requirements of other operators. An influx of PCS subscribers roaming into GSM freely would overload those GSM networks and seriously undetermined quality of service leading to call congestion and lower transmission quality. Hutchison is of the view that PCS operators should build their own networks to provide the required coverage. When PCS licence bids were submitted there was no entitlement to GSM roaming. To force GSM operators to allow PCS subscribers to roam onto their networks would amount to appropriation of the GSM operators’ assets. To force domestic roaming on the industry would discourage investment by PCS operators. A reduction or lack of PCS investment will result in PCS customers in the longer term suffering from service limitation and higher call charges arising from resultant excessive roaming onto GSM networks. The cutting back of investment will result in lower service standards and lower returns. This will start a vicious circle that will ultimately result in cost cutting and closure or consolidation of networks, all leading to the reduction of employment opportunities and employee redundancy. Hutchison is of the opinion that the TA has no jurisdiction to mandate domestic roaming under section 36A of the Telecommunication Ordinance or otherwise. Roaming is quite different in concept to interconnection and falls outside the scope of section 36(A) of the Ordinance. Domestic roaming does not constitute “interconnection”. It involves 11
  12. 12. the origination of a call on one network and its termination on another. It is essentially a carrier to carrier relationship. To treat roaming as interconnection would entail treating all arrangements between owner of handsets and network operators. Mandarin SUNDAY believes that domestic roaming with a GSM Communications Ltd. 900 operator does not offer an equivalent dual band service (SUNDAY) for the standalone PCS operators. Networks that are domestically roaming cannot hand off calls and therefore the call drops. Dropped calls give the impression to the subscriber that they are using an inferior network. The requirement to use another network only serves to underline the superiority of that network's coverage, thereby undermining the position of the original network. Revenue will be lost for calls that are continued on the GSM 900 network even when back in an area covered by GSM 1800 due to the need to pay roaming fees rather than collect standard air time fees. There is a very short window of opportunity to recover the administration and logistic costs if domestic roaming would not be required by SUNDAY after having a fully competitive network in mid 1999. Domestic roaming is not a feasible operational or commercial solution for matching the supremacy afforded the PMRS/PCS operators by dual band service. SUNDAY does not see domestic roaming as useful in promoting fair and effective competition but rather believes that it clearly serves to underline the differences in the networks and thereby directly hinders SUNDAY's ability to be competitive. New World PCS Ltd. There is an inherent risk that GSM operators will grant (NWPCS) favouritism to their affiliates while discriminating other standalone PCS operators, which are literally competitors of themselves. NWPCS proposes that PCS calls roam to GSM network should have the roamed calls separately identified in customer's bill and roaming calls should be considered as premium rate service which should be separately chargeable and should not be covered under the standard service plan. GSM operators offering domestic roaming should offer the same roaming rate to all PCS operators. The TA should actively involve in commercial discussion between mobile operators on roaming arrangement to ensure only relevant cost are recovered. The TA should also intervene if necessary to ensure the implementation of 12
  13. 13. domestic roaming will not be unnecessarily delayed to give advantageous headstart by PMRS/PCS operators. Peoples Telephone Co. Peoples Phone is of the view that the introduction of domestic Ltd. (Peoples Phone) roaming is not the best option. Domestic roaming is only advocated as a necessary entry condition of PCS entrants where there is a sparse population but not Hong Kong. Taking into consideration its network rollout, Peoples Phone envisages that domestic roaming would be useful for a period of six months and it would not be commercially viable for the three standalone operators to do so as it would involve a major investment in terms of money. Other reasons for not supporting domestic roaming are service quality will depend on its competitors’ standards, ability to provide Value Added Services may be complicated through a non-proprietary network, the display of customer’s terminal will show the name of its competitor’s network, handovers between its network and that of its competitors are impossible, less revenue will be gained from call minutes as it will be charged for domestic roaming minutes, and significant investments may have to be made to allow its billing systems to accept call detail records that are generated from switches in other networks. Peoples Phone believes that the imposition of domestic roaming would not adequately compensate the three standalone operators for the significant advantages to be gained by allowing PMRS/PCS operators to integrate their networks. These advantages include dual band operators can gradually increase spectrum in line with demand by putting PCS-transmitters in areas first where congestion is a problem and may balance between GSM and PCS, and therefore creates a more efficient and cheaper network than any of the standalone PCS operators could provide. Dual band operation immediately relieves the PMRS/PCS operators’ capacity requirements in hot spot areas, thereby upgrading their overall service quality in only a few months. PMRS/PCS operators will be able to sell dual band phones from the first day, providing full coverage almost instantly. Combining the cell sites may allow the PMRS/PCS operators to roll out their PCS network at considerably higher speed than any of the three standalone PCS competitors. However if OFTA makes decision to sanction domestic roaming as a form of compromise, then Peoples Phone would advocate that: 13
  14. 14. • Dual band network operations should not be permitted until domestic roaming agreements with the three standalone PCS are in place; • OFTA will ensure that the introduction of domestic roaming will be subject to fair compensation through roaming charges and that the fair setting of interconnection charges are applied which are based on the reasonable relevant costs. Peoples Phone would also encourage OFTA's involvement in determining a fair interconnection charge; • OFTA will set up a one year moratorium of all PCS operators starting from the date of approval for the use of dual band network integration; • Assurance should be given from OFTA that the standalone PCS operators be allocated frequency in addition to the 10 MHz already reserved for them; and • Assurance from OFTA that dual band network operators must adhere to the advertising code of practice and not promote their network be denigrating the single band network operators. SmarTone Mobile SmarTone is seriously concerned that if domestic roaming is Communications Ltd. mandated, the quality of services being provided to the (SmarTone) consumers could be jeopardised both during normal operations and in emergency situation. Domestic roaming would introduce the significant risk of leading to an "avalanche effect" in a crisis situation such that there could be a significant and unexpected surge in traffic that might overload a second network. Of critical importance, is the fact that access to emergency services is threatened by the introduction of domestic roaming. Commercial negotiation will alleviate concerns regarding the potential for "cream skimming" by operators. SmarTone believes that domestic roaming does not contribute to the betterment of mobile communications services in Hong Kong and on the contrary, would significantly threaten mobile service quality and, more specifically, access to emergency services. Therefore, SmarTone would urge the TA to rely upon commercial processes and market forces. Sun Hung Kai Properties SHK comments that the TA should leave to the market to Ltd. (SHK) reach any domestic roaming arrangement and the setting of interconnection charges between operators through commercial negotiations among operators. Domestic roaming could enhance the coverage of operators and facilitate the 14
  15. 15. development of fair and effective competition in the market. Shortcomings of domestic roaming include mandatory domestic roaming forces PMRS/PCS operators to accept substantial investment risk; service quality of PMRS/PCS operators would be impaired since additional traffic from standalone PCS operators could cause serious congestion in their networks; infrastructure investment would be substantially reduced to sub-optimal level as operators would have no incentive to invest further to improve their infrastructure; and "cream-skimming" of standalone PCS operators is encouraged such that they only invest in areas which are economically viable and rely on domestic roaming in other areas. PMRS/PCS operators would be forced to subsidise the rollout of standalone PCS operators. Mr. Alex Tsui (Interested Mr. Tsui agrees on the OFTA's view of domestic roaming. He personnel) foresees some technical difficulties in domestic roaming and multi-band handover including "timer for return to HPLMN" as the phase 1 SIM does not contain this timer; the mobile might not camp to the most suitable cell before user initiates a call and that will reduce the call setup successful rate, and increase the call drop rate; inter-PLMN handover is technically feasible to certain extend, the mobile has no knowledge that it is being handed over to a different PLMN. Once the call ends, the mobile should search and probably camp to the PCS network as VPLMN if the HPLMN is not found. 15

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