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Hong Kong - Telecoms, Mobile, Broadband and Forecasts

Published By :

BuddeComm

Published Date : Apr 2013

Category :

Broadband

No. of Pages : 106 Pages


Executive Summary

Rising imperative for new business models to succeed as LTE and FttX fuel data demand

Hong Kong, a Special Administrative Region (SAR) of China, has built one of the most sophisticated and dynamic telecommunications markets in the world. Hong Kong’s regulator, the Office of the Communications Authority (OFCA), has played a major role in developing the telecom sector. The country has put in place substantial infrastructure which supports one of the world’s highest population penetration of mobile and fixed telephone services at around 230% and 50% respectively. 

In addition to Hong Kong’s strong technology edge, its close geographical proximity to mainland China makes it a key gateway for all foreign telecom companies and equipment vendors. Hong Kong is also a key regional telecommunications hub and is the landing point for a number of strategically important submarine cables.

Hong Kong provides 90% of all households with access to broadband connectivity. The number of broadband subscribers represents about 75% of the total internet subscriber base. The extensive FttX, DSL and cable coverage coupled with a large fibre optic footprint has driven the market for triple play services and IPTV.

The mobile market continues to evolve as all operators have now launched LTE services. A stronger than anticipated mobile growth rate has resulted in BuddeComm lifting the forecast to 2018. The strong up-take in 4G has seen an encouraging lift in ARPU due to operators changing pricing plan constructs, which has mitigated accelerated declines in SMS traffic volumes.

Key Highlights:

  • Fixed line subscriptions decline faster than expected, impacted by increased VoIP usage coupled with an element of mobile substitution.
  • Fixed broadband growth is the slowest on record although this is largely attributed to household penetration levels reaching 90%. Fibre accounts for 60% of all broadband subscriptions and Hong Kong is a world leader in terms of broadband connection speeds and competitive pricing.
  • 3G/4Gsubscriptions consist of close to 60% of the total mobile base while data contributions to mobile revenue now exceed 50%.
  • An additional 50MHz of spectrum in the 2.5/2.6GHz band was awarded to five operators which will alleviate short term spectrum congestion concerns. Increasing smartphone and tablet adoption has resulted in a six-fold increase in mobile data used per subscriber over the past four years. . The average 2.5G/3G/4G subscriber used in excess of 750Mbytes per month in 2012.
  • 2012 saw increased Wi-Fi deployment in Hong Kong. Notably, Hong Kong Broadband Network acquired a well established Wi-Fi wholesale operator to expand its consumer reach.
  • Domestic traffic demand has been met by a 45% increase in equipped submarine capacity over 2012 and a 27% increase in activated submarine capacity.
Table of Contents

1. Key Statistics

2. Country Overview
2.1 Background
2.2 Hong Kong’s economy

3. Telecommunications Market
3.1 Overview of Hong Kong’s telecom market
3.2 Competition in the market
3.3 Market pricing
3.3.1 2008
3.3.2 2011
3.4 Focus on innovation in a mature market
3.5 Telecommunications market sectors
3.5.1 Fixed-line and mobile phones
3.5.2 Fixed telecommunications services – background
3.5.3 Internet and broadband
3.5.4 Submarine cable networks

4. Regulatory Environment
4.1 Overview
4.2 OFCA (Office of the Communications Authority)
4.2.1 OFTA (Office of the Telecommunications Authority)
4.3 Regulatory developments – 2000-2013

5. Major Operators
5.1 Pacific Century CyberWorks (PCCW)
5.1.1 Company overview
5.1.2 Company background
5.1.3 Financial statistics
5.1.4 Operations statistics
5.2 City Telecom (HK) Ltd (HKBN)
5.2.1 Company overview
5.2.2 Company background
5.3 Hutchison Telecom Hong Kong Holdings (HTHKH)
5.3.1 Company overview
5.3.2 Company background
5.3.3 Financial statistics
5.3.4 Operational statistics
5.4 Wharf T&T Hong Kong (i-Cable)
5.4.1 Company overview
5.4.2 Company background
5.4.3 Financial statistics
5.4.4 Operational statistics
5.5 CSL
5.5.1 Company overview
5.5.2 Company background
5.5.3 Operational statistics
5.6 China Mobile Hong Kong (Peoples)
5.7 SmarTone-Vodafone
5.7.1 Company overview
5.7.2 Company background
5.7.3 Financial statistics
5.7.4 Operational statistics

6. Internet Market
6.1 Overview
6.2 Internet statistics
6.3 Internet traffic volume
6.4 Domain names
6.5 Internet contribution to GDP

7. Broadband Market
7.1 Background
7.2 Overview
7.3 Broadband statistics
7.4 Broadband performance pledges
7.5 Digital 21 IT Strategy
7.6 Broadband Survey results
7.6.1 Saïd Business School
7.6.2 Akamai Technologies
7.7 FttB/FttH building registration scheme
7.8 Broadband technologies
7.8.1 Overview
7.8.2 Cable modems
7.8.3 Digital subscriber line (DSL)
7.8.4 Fibre to the home (FttH)
7.8.5 Wireless access
7.9 Major broadband operators
7.9.1 i-Cable Communications (Hong Kong Cable Television Ltd)
7.9.2 Hong Kong Broadband Network Services (City Telecom – CTInets)
7.9.3 PCCW
7.9.4 SmarTone Broadband Services
7.10 Broadband television in Hong Kong
7.10.1 Internet protocol TV (IPTV)
7.10.2 Cable television (CATV)

8. Digital Media / Digital Economy
8.1 Television broadcasting
8.1.1 Overview
8.1.2 Transmission modes
8.1.3 Pay TV
8.1.4 Free-to-air (FTA) television

9. Mobile Communications
9.1 Overview
9.2 Market status 2013
9.3 Mobile statistics
9.3.1 Mobile subscribers 1984-2012
9.3.2 Mobile prepaid cards 1997-2013
9.3.3 Mobile subscribers by operator
9.4 Regulatory issues
9.4.1 Mobile number portability (MNP)
9.4.2 Spectrum licensing
9.5 Mobile technologies
9.5.1 Analogue
9.5.2 Telepoint CT-2
9.5.3 GSM/2G
9.5.4 Personal communications services (PCS)/2G
9.5.5 High-speed circuit-switched data (HSCSD)
9.5.6 General packet radio service (GPRS)
9.5.7 Enhanced data for GSM evolution (EDGE)
9.5.8 High-speed downlink packet access (HSDPA)
9.5.9 CDMA
9.5.10 CDMA2000
9.5.11 Third Generation (3G) mobile
9.5.12 LTE (Long-term evolution)/4G
9.6 Mobile virtual network operators (MVNO)
9.7 Mobile services
9.7.1 Short message service (SMS)
9.7.2 Mobile data usage 
9.8 Mobile content
9.8.1 Background
9.8.2 Mobile phone versus smartphone usage
9.8.3 Smartphones and tablets
9.8.4 Mobile TV
9.8.5 Mobile music
9.8.6 Stock trading

10. Forecasts
10.1 Forecast fixed line subscribers – 2013-2014; 2018
10.2 Forecast broadband subscribers: 2013-2014; 2018
10.3 Forecast total mobile and 3G subscribers – 2013-2014; 2018

List of Table


Table 1 – Country statistics Hong Kong – 2013
Table 2 – Telecommunications revenue and investment – 2012 (e)
Table 3 – Telephone network statistics – January 2013
Table 4 – Internet statistics – March 2013
Table 5 – Broadband statistics – January 2013
Table 6 – Mobile statistics – January 2013
Table 7 – National telecommunications authorities
Table 8 – Hong Kong telecoms service revenue and capex – 1994 – 2011
Table 9 – Number of telecoms operators by category – March 2013
Table 10 – Fixed line versus mobile subscriptions and penetration rates – 1998 - 2014
Table 11 – Fixed-line telephony subscribers – 2000 – 2013
Table 12 – External fixed-line telephone traffic volume in minutes – 1997 – 2012
Table 13 – IP telephony subscribers – 2007 - 2013
Table 14 – External telecommunications facilities capacity of Hong Kong – 2000 - 2012
Table 15 – PCCW consolidated revenue, EBITDA and profit US$ – 2001 - 2012
Table 16 – PCCW core revenue US$ – 2006 – 2012
Table 17 – PCCW TSS revenue US$ – 2008 – 2012
Table 18 – PCCW exchange lines in service – 2003 – 2012
Table 19 – PCCW 2G and 3G subscribers – 2005 - 2012
Table 20 – PCCW prepaid and postpaid subscribers – 2005 - 2012
Table 21 – PCCW 3G and blended ARPU – 2007 – 2012
Table 22 – City Telecom revenue and profit – 2001 – 2011
Table 23 – HTHKH revenue and profit – 2006 – 2012
Table 24 – HTHKH mobile service revenue for data, voice, roaming – 2009 – 2012
Table 25 – Hutchison mobile subscribers and annual change – 1998 – 2012
Table 26 – Hutchison 3G mobile subscribers and annual change – 2004 - 2008
Table 27 – HTHKH mobile subscribers 2G and 3G postpaid and total - 2008 - 2012
Table 28 – Hutchison postpaid ARPU – 2010 – 2012
Table 29 – i-Cable revenue and profit – 2005 – 2012
Table 30 – Wharf T&T fixed-line, i-Cable broadband and pay TV subscribers – 2001 - 2012
Table 31 – Hong Kong CSL subscribers and annual change – 1998 - 2005
Table 32 – New World Mobility subscribers and annual change – 1998 - 2005
Table 33 – CSL New World subscribers and annual change – 2006 - 2012
Table 34 – Peoples (China Mobile Hong Kong) subscribers and annual change – 1998 - 2012
Table 35 – SmarTone revenue and profit – 2002 - 2012
Table 36 – SmarTone - ARPU and data contribution – 2002 - 2012
Table 37 – SmarTone subscribers and annual change – 1998 - 2012
Table 38 – SmarTone - 3G subscribers – 2004 – 2012
Table 39 – Internet users and subscribers – 1996 - 2013
Table 40 – Internet traffic volume (PSTN and broadband) – 1997 – 2012
Table 41 – Use of international private leased circuits (IPLCs) – 2002 - 2012
Table 42 – Registered domain names – 2004 – 2013
Table 43 – Broadband internet access subscribers – 2000 - 2013
Table 44 – Narrowband internet access subscribers – 2000 - 2013
Table 45 – Prepaid and leased line internet access subscribers – 2000 – 2013
Table 46 – Broadband subscribers and households – January 2013
Table 47 – Broadband internet traffic volume – 2000 – 2012
Table 48 – Broadband performance pledges – Q4 2012
Table 49 – Digital 21 Strategy – key indicators – April 2013
Table 50 – Broadband ranking evolution top 10 countries – 2008 - 2010
Table 51 – Broadband subscribers by operator – 2007 - 2012
Table 52 – Cable modem internet subscribers – 2000 - 2014
Table 53 – DSL subscribers – 1999 - 2014
Table 54 – FttX subscribers – 2001 - 2014
Table 55 – i-Cable broadband and VoIP subscribers and penetration – 2000 - 2012
Table 56 – i-Cable cable TV subscribers, penetration and ARPU – 1995 – 2012
Table 57 – HKBN triple play subscribers, ARPU and IDD traffic volume – 2003 – 2012
Table 58 – PCCW broadband subscribers – 2000 - 2012
Table 59 – PCCW NOW TV subscribers and ARPU – 2003 - 2012
Table 60 – IPTV subscribers – 2003 - 2012
Table 61 – Cable television subscribers – 2000 - 2012
Table 62 – Broadcasting service statistics – March 2013
Table 63 – TV household penetration by licence type – March 2013
Table 64 – TV channels provided by all TV licensees in Hong Kong – 2000 - 2012
Table 65 – Hong Kong households’ TV coverage by transmission modes – December 2009
Table 66 – Digital terrestrial television population coverage – 2007 - 2011
Table 67 – Pay TV subscribers – 2000 - 2010
Table 68 – Mobile subscribers and annual change – 1984 - 2014
Table 69 – Prepaid and activated SIM cards – 1997 – 2013
Table 70 – Mobile operators, technology, subscribers and annual change – March 2009
Table 71 – Selected mobile operator subscribers and market share – December 2012
Table 72 – Operator market share by subscribers – 2003 – 2011
Table 73 – Total mobile numbers ported – 1999 – 2012
Table 74 – Analogue subscribers and annual change – 1984 - 1997
Table 75 – GSM 2G subscribers and annual change – 1993 – 2012
Table 76 – PCS subscribers and annual change – 1997 – 2008
Table 77 – 2.5G subscribers – 2002 – 2012
Table 78 – 3G/4G mobile subscribers – 2005 – 2012
Table 79 – MVNO subscribers – 2005 – 2012
Table 80 – SMS messages sent and received – 2002 – 2012
Table 81 – SMS statistics for Christmas Day and New Years Day – 2005 - 2013
Table 82 – SMS statistics for Valentine’s Day and Chinese New Year Day – 2006 – 2013
Table 83 – Mobile data usage – 2002 – 2012
Table 84 – Forecast fixed-line subscribers and penetration - higher band – 2013 - 2014; 2018
Table 85 – Forecast fixed-line subscribers and penetration - lower band – 2013 - 2014; 2018
Table 86 – Forecast broadband subscribers and penetration - higher band: 2013 - 2014; 2018
Table 87 – Forecast broadband subscribers and penetration - lower band: 2013 - 2014; 2018
Table 88 – Forecast mobile subscribers and penetration higher band forecast – 2013 - 2014; 2018
Table 89 – Forecast mobile subscribers and penetration lower band forecast – 2013 - 2014; 2018

List of Chart


Chart 1 – Hong Kong service revenue and capex – 1995 - 2011
Chart 2 – Hong Kong fixed-line and mobile subscribers – 1995 - 2014
Chart 3 – Hong Kong fixed-line telephony subscribers – 2000 - 2013
Chart 4 – Hong Kong IP telephony subscribers – 2007 - 2013
Chart 5 – PCCW revenue, capex, ARPU – 2006 - 2012
Chart 6 – Hong Kong internet users, subscribers and user penetration – 1997 - 2011
Chart 7 – Hong Kong international capacity and broadband traffic volume – 2002 - 2012
Chart 8 – Hong Kong broadband internet subscribers and population penetration – 2000 - 2014
Chart 9 – Hong Kong internet subscribers by type – 2000 - 2012
Chart 10 – Hong Kong broadband internet subscribers by access type – 2000 - 2014
Chart 11 – Hong Kong cable modem internet subscribers – 2000 - 2014
Chart 12 – Hong Kong DSL internet subscribers – 2000 - 2014
Chart 13 – Hong Kong cable FttX subscribers – 2007 - 2014
Chart 14 – Hong Kong mobile subscriber growth, population penetration – 1995 - 2012
Chart 15 – Hong Kong technology market share – 1990 - 2012
Chart 16 – Hong Kong 3G/4G mobile subscribers – 2005 - 2012
Chart 17 – Quality profile of smartphone users – end 2010

Exhibit 1 – Map of Hong Kong
Exhibit 2 – Licensees and issue dates – April 2013
Exhibit 3 – Major operators by service type - 2011
Exhibit 4 – Major submarine cables with landing points in Hong Kong – 2012
Exhibit 5 – The ‘original’ PCCW deal
Exhibit 6 – HTHKH frequency allocations – 2012
Exhibit 7 –TV broadcasting licensees – March 2013
Exhibit 8 – Transmission modes employed by TV licensees
Exhibit 9 – Mobile virtual network operator licensees – April 2013
Exhibit 10 – Top 10 activities on mobile phones versus smartphones – 2010

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