Hong Kong Telecom, a PCCW subsidiary sold CSL to Telstra over a decade ago and first announced a deal to reacquire the company in December 2013.
The authorities ruled that to complete the deal, the two companies will be required to divest a total of 29.6MHz of 3G spectrum.
The regulator stipulated that HKT and CSL will not be allowed to buy 3G spectrum for five years and they will need to continue providing network and base station access to rivals.
"This will reduce the spectrum concentration on the part of HKT and CSL combined following expiry of the 3G spectrum assignment in October 2016. The acquisition of the divested spectrum by competitors of the merged entity will equip them with sufficient network capacity to enable them to compete effectively with the merged entity,” the regulator announced in a statement.
Earlier this year, PCCW filed a court case against regulators in Hong Kong over a government plan to redistribute a third of existing 3G spectrum licences later this year.
