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Specific regulation for the tendering of the
licence of operation of code division multiple access (CDMA) public land mobile telecommunications network and provision of roaming mobile telecommunications services in the Macao Special Administrative Region of the People's Republic of China

Section 1 – Introduction

1.1. The Government of the Macao Special Administrative Region (MSAR) liberalised the market of the mobile telecommunications services in the year 2000, and since then three Licences of Public Land Mobile Telecommunications Service and one Authorisation of Mobile Virtual Network Operator have been issued.

1.2. The three existing Public Land Mobile Telecommunications Network Operators and the Public Mobile Telecommunications Service Providers (Operators and Providers hereafter) adopted the Global System for Mobile Communications (GSM) standard.

1.3. Considering that the Government of MSAR is keen at developing the industries of gambling, tourism, conventions and exhibitions, and the unrolling of large-scale sports and cultural activities, it is expected that a large amount of tourists, who are not using GSM standard mobile phones, will come to Macao, and therefore, it is necessary to introduce another commonly used standard CDMA in order to satisfy the needs in communication during their stay in Macao.

1.4. Taking into consideration the dimension of telecommunications market of Macao, it is more appropriate, at this moment, to establish a network using the CDMA2000 1X system, for the provision of roaming mobile telecommunications service. After one year counting from the date of issuing the Licence, with the request of the Licensee, the Government of MSAR can revise the scope of the mobile telecommunications services specified in the Licence.

1.5. For better understanding of this Regulation, the roaming mobile telecommunication service is defined as the ability of the clients of the foreign mobile telecommunications network operators and service providers, during their stay in Macao, to use the mobile telecommunications services, such as voice, data and multimedia, through the CDMA2000 1X network established by the holder of the Licence which is granted in compliance with this Regulation.

1.6. The Licensee can build its own mobile service international gateway, through the external telecommunications infrastructures established by the concessionaire or proper licence holders, in order to ensure the availability of the facilities needed for the communications in the roaming mobile telecommunications services.

1.7. The mobile service international gateway shall in no case be engaged in the practice of refiling without the prior consent in writing by the Government of MSAR.

1.8. Definitions of technical terms used in this Regulation should be referred to the relevant International Telecommunication Union (ITU) documents, regulations and recommendations.

1.9. This Regulation intends to provide the information and procedures for Licence applications. To follow the rules mentioned in this regulation does not, in any case, bind the Government of MSAR to grant any Licence.

Section 2 – Applicable Legislations

2.1. In preparing proposals, the major relevant legislation and regulations for mobile telecommunications services, shown in the following, should be considered:

2.2. The major concession contracts and licences related to the area of mobile telecommunication service are as follows:

Section 3 – Applicants

3.1. The commercial companies, consortiums or economic interest groupings, established or to be established, can participate in the tendering.

3.2. The partners of the tendering companies or members of the applicant consortia should be established, by presenting the confirmation document of the commercial registry from the Commercial and Movable Goods Registry in Macao; if the companies or consortia were established outside of MSAR, the copy of the foreign registration, duly certified by notary, should be presented.

3.3. Applicants should be both financially and technically qualified. In supporting this, applicants are requested to submit the company's past financial statements and annual audit reports and demonstrate the experience in installing and operating systems of telecommunications.

3.4. Applicants, when submitting the proposals, are not allowed to be shareholders or have any other interest in any other applicant for the Licence.

Section 4 – Composition of the proposals, method and deadline for presenting the proposals

4.1. Proposals should be submitted in triplicate, written in the official languages of MSAR or in English, opaquely covered and wax-sealed, and must be sent to the address shown below not later than 5 o' clock in the afternoon of 8th November 2004, and the acknowledgement of receipt could be obtained:

Office for the Development of Telecommunications
and Information Technology
789, Avenida da Praia Grande, 3/F,
Macao Special Administrative Region

4.2. Late applications will be rejected.

4.3. The applicants may request for clarification of any doubts with respect to the clauses of this Regulation or regarding the subjects of this tendering process, before 21st October 2004.

4.4. All the applications for clarifications should be made in writing and sent to the address shown in point 4.1 above, soliciting a proof of receipt, or sent by registered mail with acknowledgement of receipt to the same address or sent by fax to the number +853 356328.

4.5. Clarifications will be provided by the Office for the Development of Telecommunications and Information Technology not later than 28th October 2004.

4.6. In designing the network and preparing the proposals, the following radio spectrum available in the MSAR should be considered:

• 825 – 845 MHz

• 870 – 890 MHz

4.7. The proposal should explicitly indicate the system capacity and capacity for expansion.

4.8. Specifications on the radio interface used in the proposed system should be provided.

4.9. It is necessary to provide the network design and configuration, namely, among others, number and location of base station, number and location of mobile switching centre, point of interconnection, channel arrangement, antenna type, effective radiated power, features supported by the network, and the list of equipment.

4.10. The organizational structure and the estimation of local job opportunities to be created should be included when submitting the proposal.

4.11. Regarding the operational aspects, the applicants are necessary to elaborate, at least, a business plan for the first year and a 3-year business plan.

4.12. Along with the business plan, it is important to submit an investment plan, taking into consideration the timeframe stated in point 4.24.

4.13. In the investment plan, the cost of network interconnection with the existing operators (including the fixed telephone network operator) and the cost derived from the services of mobile number portability for local mobile telecommunications users, should be considered.

4.14. According to the general principle adopted by the Government of MSAR, the ways and charges of interconnection between the networks of the new operator and the existing operators (including fixed telephone network operator) should be settled among themselves, based on commercial negotiation, yet the existing regulations and the directives issued by the Government must be observed.

4.15. No discrimination should be practiced by the existing operators on the charges of interconnection to be levied from the holder of this roaming mobile telecommunications service Licence.

4.16. The agreement reached should then be submitted to the Government of MSAR for approval. Should there be dispute arisen and no conclusion reached, after listening to the opinions of the related parties, the Government of MSAR can fix the charges for the interconnection on a cost basis, and the existing interconnection charge level will also be taken as a reference.

4.17. Evidence should be provided to prove the financial capability for the network development.

4.18. The billing and operation supporting systems to be adopted, including the customer care services, need to be described with sufficient information.

4.19. The proposal should indicate the charges for the non-local customers who use the roaming mobile telecommunications service in Macao.

4.20. Types of services to be offered should be clearly stated.

4.21. If there are field tests conducted, such results should be attached to the proposal.

4.22. Aspects stated in the proposals should be based on detailed studies and independent market survey.

4.23. Applicants should also present an overview of the potential benefits that their proposed investment plans could contribute to the society and economy of the MSAR.

4.24. Applicants should propose a system constructing plan with the objective to achieve a good quality territory wide coverage of the MSAR in a period of one year, counting from the date of starting to provide commercial services.

4.25. The proposal should be signed by legal representative of the applicant, whose signature must be recognized by notary.

4.26. The submitted proposals should remain valid for a period of 180 days, counting from the date mentioned in point 5.1.

Section 5 – Opening of the proposals

5.1. All valid proposals received or delivered before deadline will be opened at 3 o' clock in the afternoon of 9th November 2004, in the Office for the Development of Telecommunications and Information Technology.

5.2. Representatives of applicants, with adequate credentials, can attend the session for proposal opening.

5.3. The Government of MSAR reserves the right not to disclose the names of partners and members of applicants.

Section 6 – Evaluation of the proposals

6.1. The evaluation will follow immediately after the opening of the proposals.

6.2. For the sake of evaluating the proposals, when considering necessary, the Government of MSAR may request the applicants to provide supplementary information or explanations about the documents already submitted.

6.3. Proposals will be evaluated by the Office for the Development of Telecommunications and Information Technology, considering their own merits, the information provided on request as well as the situations and selection criteria outlined in the following point of this Section, not excluding, nevertheless, other evaluation criteria which are pertinent to the interest of the MSAR.

6.4. In evaluation of the proposals, the following situations and criteria will be considered with priority:

• Applicants who have relevant experiences in the telecommunication industry;
• As to the companies or consortia established or to be established for the tendering, the shareholder or member, who possesses a company participation equal or higher than 51% of the capital, has relevant experiences in the telecommunication industry;
• The applicants, their partners or members, before the publication of this Regulation, do not own any Licence for Public Land Mobile Telecommunication Services or Authorisation of Mobile Virtual Network Operator issued by the Government of MSAR;
• The commitment of providing systems of state-of-the-art and sophisticated capability;
• Investment committed and financial background;
• Technical aspects with regard to the infrastructure of the proposed networks;
• Implementation schedule for achieving a good quality coverage of the MSAR;
• Grade of service to be offered and system performance standards;
• Management and technical expertise of the corporation;
• Tariff to be adopted for the proposed services;
• Training programs and facilities to be provided to local personnel;
• Economic and social benefits delivered to the MSAR;
• Organizational structure.

6.5. The successful candidate should first conform to the conditions stated in item 1) of Article 6 of the Regulamento Administrativo no. 7/2002, before the Licence is granted.

Section 7 – Final decision

7.1. The licensing decision should be made according to the time specified in no. 3 of Article 5 of the Regulamento Administrativo no. 7/2002.

7.2. The Office for the Development of Telecommunications and Information Technology will inform all applicants with regard to the licensing decision, by registered mail with acknowledgement of receipt.

Section 8 – Guarantees

8.1. To ensure the assumption of restrictions produced by submitting the proposals and the fulfilment of obligations inherent in the tendering process, applicants must provide a provisional guarantee in favour of the Government of the MSAR, in the amount of MOP 200 000.00 (two hundred thousand patacas).

8.2. Pursuant to Article 7 of the Regulamento Administrativo no. 7/2002, the applicant who obtains the Licence is obliged to increase the amount of guarantee stated in the previous point to MOP 2 000 000.00 (two million patacas).

8.3. The guarantees should be deposited in cash in one of the agent banks of MSAR, or through bank guarantee or performance bond, in regime on first demand, contracted in banks or insurance companies operating in MSAR.

8.4. The other applicants, after the validity period of the proposals or the issuance of licence before the expiration of that period, can request the return of the amount deposited or the cancellation of the bank guarantee or performance bond.

8.5. Applicants have the right to request the return of the amount deposited or the cancellation of the guarantee or performance bond if the proposals submitted by the applicants are not admitted to the tendering process.

8.6. All the expenses resulting from providing or drawing out the guarantees shall be borne by the applicants.

8.7. If the applicant or the Licensee, by any reasons, gives up the tendering or Licence, out of their own will, the guarantee provided will revert in favour of the Government of MSAR, unless the justifications are duly accepted in writing by the Government.

Section 9 – Issuance of Licence

9.1. According to no. 2 of Article 4 of Regulamento Administrativo no. 7/2002, the validity of the Licence is of eight year; the Licensee could apply to the Government of MSAR, at minimum two years before the end of the term of respective Licence, and it could be renewed in a period of not more than 8 years.

9.2. The Government may refuse the Licence renewal according to the actual market development situation and will not be subject to any indemnification made to the Licensee.

Section 10 – Other terms and conditions to be complied by the Licensee

10.1. The necessary numbering resources for effective network operation and service provision will be managed and allocated in accordance with the Regulamento Administrativo no. 15/2002.

10.2. Considering that the Licence at this stage only permits the provision of roaming mobile telecommunications services, aside from the numbers used in the network operation or specific services, no local users number block will be allocated to the Licensee.

10.3. The Constitution and Convention of the International Telecommunication Union as well as the ITU-T and ITU-R Recommendations and Reports should be closely observed by the Licensee.

10.4. If the Licensee changes the technical specification of the system unilaterally during the validity period of the Licence, the Government has the right to revoke the Licence.

10.5. The Licensee should provide commercial services within a period of 240 days, counting from the date of issuing the Licence.

10.6. Prior to the provision of commercial services to the public, the Licensee is not entitled to transfer the Licence to a third party. If the Licensee intends to transfer the Licence after the launch of commercial service, it should be requested in accordance with Article 10 of the Regulamento Administrativo no. 7/2002.

10.7. If the Licensee, out of any reason, decides not to go ahead with the project, the Government of MSAR has the right to choose an unsuccessful candidate to take up the Licence, before the expiration of the period mentioned in point 7.1 of this Regulation.

10.8. The Licensee is levied by the Government of MSAR an annual fee equal to 5% on the annual gross revenue, resulting from the activities specified in the framework of the Licence. The fee is settled quarterly and should be paid to the Government within 30 days after the end of each quarter.

10.9. The Licence is issued with a charge of MOP 100 000.00 (one hundred thousand patacas), and should be paid within 15 days after the Licence issued.

10.10. The payments mentioned in points 10.8 and 10.9, do not exempt the Licensee from the obligation of paying any other fees or taxes, including the radio spectrum usage fees.

10.11. It is the responsibility of the Licensee to provide good quality services to its customers in compliance with generally accepted service quality and system performance standards.

10.12. As part of the obligations of the Licensee, emergency calls and assistance calls made by users should not be charged.

10.13. The Licence will grant to the Licensee all the rights and obligations related to the services stated in this Regulation, and the rights and obligations listed in the Regulamento Administrativo no. 7/2002. The special conditions mentioned in the proposal may be considered as exceptional terms and conditions.

10.14. The Licensee shall indemnify the Government of MSAR against any damage that the Government will suffer, as a consequence of activities related to the provision of services or the installation, maintenance and operation of the network.

10.15. The Licensee should cooperate with the public departments of MSAR that, within the scope of their power and duty, impose specific requirements or rules on the network built or to be built.

NOTE: Should there be any discrepancy noted between this English translation and the published Chinese and Portuguese texts of the Regulation as annexed to the Ordem Executiva no. 29/2004, the latter two versions will prevail.