Services-based Operator Licences

Services-based Operator Licences | Bestar

Hong Kong SBO Licence Explained

Services-based Operator Licences

In Hong Kong, telecommunications services are primarily regulated by the Office of the Communications Authority (OFCA) under the Telecommunications Ordinance (Cap. 106). For companies that provide telecommunications services without establishing and maintaining their own network infrastructure across public land, a Services-Based Operator (SBO) Licence is typically required.

Types of SBO Licences

The SBO Licence is a single licensing vehicle that can authorize various types of services, categorized into three classes:

• Class 1 SBO Licence: Authorizes the provision of local voice telephony services that have all the attributes of conventional telephone services and are subject to licence conditions similar to those of carrier licences.

• Class 2 SBO Licence: Authorizes the provision of local voice telephony services that do not have all the attributes of conventional telephone services, with minimal licensing conditions primarily aimed at protecting consumer interests.

• Class 3 SBO Licence: Covers a broad range of non-telephony services, including:

  • External Telecommunications Services (ETS): Public telecommunications services for communications between Hong Kong and outside Hong Kong, or in transit through Hong Kong (e.g., international direct dialing, international call forwarding).

  • International Value-Added Network Services (IVANS): Services that allow users to access the internet (Internet Access Services - IAS) and other value-added network services like non-real-time facsimile communications, electronic mailbox/messaging, electronic data interchange, and public teletext services.

  • Mobile Virtual Network Operator (MVNO) Services: Public radiocommunications services provided by reselling the infrastructure of licensed mobile network operators.

  • Private Payphone Services (PPS): Provision of payphone services on private land.

  • Public Radio Communications Relay (RELAY) Services: Provision of telecommunications systems for extending radio coverage of licensed mobile services.

  • Security and Fire Alarm Signals Transmission (ALARM) Services: Local public telecommunications services for transmitting alarm signals.

  • Teleconferencing (TELECON) Services: Local and/or external teleconferencing services.

  • Mobile Communications Service on Board an Aircraft (MCA): Provision of mobile communication services to airline passengers.

Key Requirements and Considerations

• Company Registration: An applicant for an SBO Licence must be a company registered under the Companies Ordinance (Cap. 622) in Hong Kong. Foreign companies can apply if they are registered as an overseas company in Hong Kong.

  
  

• No Foreign Ownership Restriction: There are no restrictions on foreign ownership of a telecommunications licence in Hong Kong.

  
  

• Reliance on FBOs: SBOs generally rely on the networks and facilities established by licensed Facility-Based Operators (FBOs) to provide their services. They are not permitted to establish and maintain telecommunications networks that cross unleased government or public land.

  
  

• Application Process:

  
  

  • Applicants must complete the SBO Licence application form provided by OFCA.

  • Required supporting documents include copies of the Certificate of Incorporation and Business Registration Certificate (for Hong Kong companies) or Certificate of Registration of Non-Hong Kong Company and Business Registration Certificate (for overseas companies).

  • Details of corporate and shareholding structure, service descriptions, and network diagrams of the intended services are also required.

  • The application can typically be submitted to OFCA or through their online application portal.

    
    

• Validity and Fees:

  
  

  • SBO licences have varying periods of validity depending on the class of service. For example, a Class 3 SBO Licence is typically valid for 12 months and is renewable annually.

  • Fees vary depending on the type and class of service authorized.

    
    

• Compliance: Licensees must comply with the conditions set out in their respective SBO licences and relevant telecommunications regulations, including observing the Code of Practice in Relation to Calling Line Identification for services involving CLI.

It is crucial for any company intending to provide telecommunications services in Hong Kong to understand the specific licensing requirements and obtain the appropriate licence from OFCA, as operating without a licence is an offense punishable by significant fines and imprisonment.

For the detailed information, it is always recommended to consult the official website of the Office of the Communications Authority (OFCA) in Hong Kong.

How Bestar can Help

Navigating the telecommunications licensing landscape in Hong Kong, particularly for Services-Based Operator (SBO) Licences, can be complex due to the detailed requirements, specific classifications, and ongoing compliance obligations. This is where professional help becomes invaluable.

Here's how Bestar can assist with the SBO Licence application and ongoing compliance in Hong Kong:

• Regulatory Compliance Advice: Bestar can provide in-depth advice on the Telecommunications Ordinance (Cap. 106) and OFCA's regulations. We can clarify which specific SBO licence class (Class 1, 2, or 3) is applicable to your proposed services, ensuring you don't apply for the wrong one or miss necessary authorizations.

• Application Preparation and Review: We can assist in drafting and reviewing all application documents, ensuring they meet OFCA's stringent requirements. This includes the business plan, service descriptions, network diagrams, and corporate structure details. We can identify potential issues that might delay or lead to rejection of the application.

• Drafting and Negotiation of Agreements: SBOs often rely on Facility-Based Operators (FBOs) for network access. Bestar can help draft and negotiate interconnection agreements, wholesale agreements, and other commercial contracts with FBOs, ensuring favorable terms and compliance with regulatory obligations.

• Due Diligence: For mergers, acquisitions, or investments in telecommunications companies, Bestar can conduct due diligence to assess the target company's licensing status, compliance history, and potential liabilities.

• Ongoing Compliance: We can help establish internal compliance frameworks, provide training to your team on regulatory obligations, and advise on any changes to telecommunications law or policy in Hong Kong.

• Strategic Planning and Feasibility Assessment: Bestar can help assess the commercial viability of your proposed services within the regulatory framework. We can advise on market entry strategies, competitive landscape, and potential challenges.

• Licence Application Management: We act as project managers for the entire licence application process, coordinating with your internal teams, legal advisors, and OFCA. This includes preparing the application, collating supporting documents, and managing communications with the regulator.

• Industry Best Practices: They can provide insights into industry best practices in Hong Kong and internationally, helping you implement robust compliance procedures and risk management strategies.

• Company Formation and Registration: As SBO licence applicants must be Hong Kong registered companies, Bestar can assist with the incorporation process.

• Financial Projections and Feasibility Studies: We can help prepare the financial forecasts and business plans often required for licence applications, demonstrating the financial viability and sustainability of your proposed telecommunications services.

• Tax Implications: We can advise on the tax implications of operating a telecommunications business in Hong Kong.

• Audit and Reporting: For ongoing compliance, we can assist with financial reporting and audits, ensuring adherence to any financial reporting requirements stipulated by OFCA or other regulatory bodies.

When to Engage Bestar:

• Early Stage: It's often beneficial to engage Bestar at the very beginning of your planning process. This allows us to help you structure your business model to align with regulatory requirements, saving time and potential rework later.

• Complex Services: If your proposed services are innovative, fall into multiple categories, or have significant technical complexities, professional guidance is highly recommended.

• Limited Internal Resources: If your company lacks in-house expertise in Hong Kong telecommunications law or regulatory affairs, Bestar can fill this gap.

• Foreign Companies: Overseas companies looking to enter the Hong Kong market will particularly benefit from local expertise to navigate the regulatory and business environment.

By leveraging the expertise of Bestar, companies can significantly streamline the SBO Licence application process, ensure compliance, and mitigate potential risks in the highly regulated telecommunications sector of Hong Kong.

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