2010 Hong Kong - Telecoms, Mobile, Broadband and Forecasts

Publication Overview

Hong Kong has a sophisticated telecommunications infrastructure. The report covers trends and developments in telecommunications, mobile, Internet, broadband, and converging media including VoIP and IPTV developments. Subjects include:

  • Market and industry analyses, trends and developments;
  • Facts, figures and statistics;
  • Industry and regulatory issues;
  • Infrastructure;
  • Major players, revenues, subscribers, ARPU;
  • Internet, VoIP, IPTV;
  • Mobile voice and data markets;
  • Broadband (FttH, DSL, cable TV, wireless);
  • Convergence and digital media.

Researcher:- Lisa Hulme-Jones
Current publication date:- May 2010 (16th Edition)
Next publication date:- May 2011

Executive Summary

Hong Kong, a Special Administrative Region (SAR) of China, takes pride in the way it has built one of the most sophisticated telecommunications markets in the world. Hong Kong’s regulator, the Office of the Telecommunications Authority (OFTA), 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 penetrations of mobile phones and telephone services.

By early 2010, the territory had just less than 3.7 million fixed-telephone lines in service, giving 100% fixed-line household penetration rate and 52.5% fixed-line population penetration rate, amongst the highest in Asia as well as in the world. As a result of open competition in the local FTNS market and government’s withdrawal of its mandatory Type II interconnection policy, over 80% of residential households are able to enjoy an alternative choice of local fixed-network operators. Furthermore, PCCW has a universal service obligation to provide a continuous basic service, including the provision of public switched-voice telephone services anywhere in Hong Kong in a reasonable period of time.

Hong Kong has moved quickly in providing over 85% of all households with access to broadband connectivity. This has been accompanied by rapid growth in the Internet market. Broadband Internet subscriptions well and truly surpassed dial-up subscriptions by end-2005. There were in excess of 5.3 million Internet users in the territory, gaining access using either dial-up or broadband, going into 2010. The number of broadband subscribers represented about 67% of the total Internet subscriber base, supported by a large number of ISPs. By end 2009, according to OFTA, Hong Kong’s Internet subscriber base consisted of 2.06 million broadband subscribers and 979,000 dial-up subscribers. Broadband ARPU levels were increasing, as operators benefited from lower churn and higher revenue due to good quality content.

Going into 2010 there were over 12 million mobile subscribers, representing an impressive penetration of close to 170%. This included over 5.0 million 2.5G and 3G subscribers. This penetration level puts Hong Kong in a tussle with Macau for first place in the Asian mobile market (both now well ahead of previous leader, Taiwan). This is remarkable considering that Hong Kong not only has the highest density of fixed-telephone lines in the region but also that local calls on the fixed network are free. An ongoing price war cut mobile phone air-time rates to levels where operators became increasingly reliant on provision of non-voice value-added services to maintain margins. This, in turn, made 2.5G and 3G services of considerable importance.

Market highlights:

  • In a densely packed market has over 2 million TV households, PCCW ended 2009 with over 700,000 NOW TV subscribers in Hong Kong with a network reaching over one million potential customers. i-Cable closed out 2009 with around one million video subscribers.
  • Apple has added Hong Kong and Macau as markets to sell its popular multimedia phone. Hong Kong was the first market in Greater China and also one of the four Asia markets, along with Australia, Japan and New Zealand, to launch the newest version of iPhones.
  • 3G subscriptions continue to grow in a competitive market and consisted of over 30% of total mobile subscribers going into 2010.
  • Fibre deployments continue to expand while DSL subscriptions started to drop off at end 2008. The extensive fibre infrastructure in Hong Kong has allowed IPTV services to reach over 50% of households.
  • By early 2010 about 46.5% of local families, or 1.06 million households, received digital-terrestrial television services, showing the penetration rate has grown more than 40% since the end of 2008.

Hong Kong – key telecom parameters – 2008 - 2009

Sector

2008

2009

(million)

Internet

 

 

Internet users

5.25

5.30

Internet subscribers

2.86

3.04

Broadband

 

 

DSL subscribers

1.37

1.36

Total subscribers

1.92

2.41

Subscribers to telecoms services

 

 

Fixed-line subscribers

3.71

3.69

Mobile phones total

11.37

12.20

 - 3G

2.81

3.82

(Source: BuddeComm based on OFTA, ITU, Point Topic data)

For those needing high level objective analysis on Hong Kong, this report is essential reading and gives further information on:

  • HKBN’s aims to be the largest ISP service provider in Hong Kong by 2016. Three years into their strategy and while still relatively small, its 400,000 customers not only pay US$13 a month for 100Mb/s synchronous broadband, they also get a money-back guarantee
  • Three existing mobile network operators successfully bidding for radio spectrum in the 1800MHz frequency band.
  • Pacnet’s plans to spend US$300 million over the next three years on building data centres around the region. The company is pre-selling capacity in the data centres and expects revenue from hosting services to account for 40% of revenue in four to five years, up from about 6% today.
  • Operators expressing interest in the soon to be auctioned free-to-air TV licences in Hong Kong. The Hong Kong government is accepting applications for new licensees in the free TV market, which is dominated by the TVB group, with a single competitor, ATV. 

Data in this report is the latest available at the time of preparation and may not be for the current year.

Table of Contents

  • 1. Key Statistics
  • 2. Telecommunications Market
    • 2.1 Overview of Hong Kong’s telecom market
    • 2.2 Fixed Telecommunications Network Services (FTNS)
    • 2.3 International telecommunications services
  • 3. Regulatory Environment
    • 3.1 Overview
    • 3.2 OFTA (Office of the Telecommunications Authority)
      • 3.2.1 Survey of effectiveness of competition
    • 3.3 Awarding of licences
    • 3.4 Telecommunication (Amendment) Ordinance 2000
    • 3.5 Regulatory Developments in 2009
      • 3.5.1 Calling Party Pays
      • 3.5.2 OFTA to charge MVNOs for phone numbers
      • 3.5.3 OFTA allows fixed-mobile number portability
      • 3.5.4 OFTA call consultation on PCCW pricing rules
    • 3.6 Regulatory Developments in 2008
      • 3.6.1 Interconnection Fees
      • 3.6.2 GSM-1800 Frequencies
      • 3.6.3 Benchmark Pricing
      • 3.6.4 Wireless Radio Spectrum
  • 4. Major Operators
    • 4.1 Pacific Century CyberWorks (PCCW)
      • 4.1.1 PCCW Background
      • 4.1.2 PCCW Financials
      • 4.1.3 PCCW Fixed-line services
      • 4.1.4 PCCW Mobile
      • 4.1.5 HKT Group Holdings Ltd and PCCW
    • 4.2 City Telecom (HK) Ltd
      • 4.2.1 FTNS
      • 4.2.2 IDD
    • 4.3 Hutchison Whampoa Ltd
      • 4.3.1 Hutchison Telecom International Limited (HTIL)
      • 4.3.2 Hutchison Telecom Hong Kong Holdings (HTHKH)
    • 4.4 Wharf T&T Hong Kong (i-Cable)
    • 4.5 New World Telecommunications Ltd
      • 4.5.1 CSL New World
    • 4.6 Peoples (China Resources Peoples Telephone Co Ltd)
    • 4.7 SmarTone-Vodafone
  • 5. Telecommunications Infrastructure
    • 5.1 Overview
    • 5.2 Mainland connection
    • 5.3 Full liberalisation of FTNS market
      • 5.3.1 Local and STD calls
      • 5.3.2 International calls
    • 5.4 Submarine cable networks
      • 5.4.1 Pacnet Global (formerly Asia Netcom/Asia Global Crossing)
      • 5.4.2 Hutchison Global Telecommunications (Hong Kong)
      • 5.4.3 C2C Pte Ltd/Pacnet Cable
      • 5.4.4 PCCW Global
    • 5.5 Satellite networks
      • 5.5.1 AsiaSat
      • 5.5.2 APStar
      • 5.5.3 Asia Broadcast Satellite
    • 5.6 Television
      • 5.6.1 Overview
      • 5.6.2 Regulatory issues
      • 5.6.3 Technology platforms
      • 5.6.4 Pay TV
      • 5.6.5 Satellite TV
      • 5.6.6 Free-To-Air (FTA) broadcasting
  • 6. Internet Market
    • 6.1 Overview
      • 6.1.1 Statistics
    • 6.2 Internet traffic volume
    • 6.3 Domain names
    • 6.4 Wireless Internet
      • 6.4.1 Free WiFi on Hong Kong buses
  • 7. Broadband Market
    • 7.1 Overview
      • 7.1.1 Statistics
    • 7.2 Regulatory issues
    • 7.3 Digital 21 IT Strategy
      • 7.3.1 Cyberport project
    • 7.4 Voice over Internet Protocol (VoIP)
    • 7.5 Hong Kong – a connected city
    • 7.6 Cable modems
    • 7.7 Digital Subscriber Line (DSL)
    • 7.8 Major broadband operators
      • 7.8.1 i-Cable Communications (Hong Kong Cable Television Ltd)
      • 7.8.2 Hong Kong Broadband Network Services (City Telecom - CTInets)
      • 7.8.3 PCCW
      • 7.8.4 CPCNet Hong Kong (PSINet Hong Kong Ltd)
      • 7.8.5 Pacnet (Pacific Internet)
      • 7.8.6 SmarTone Broadband Services
    • 7.9 Triple play models
    • 7.10 Quadruple play models
  • 8. Digital Media / Digital Economy
    • 8.1 Digital broadcasting
      • 8.1.1 Digital Terrestrial Television (DTTV)
      • 8.1.2 Digital Cable Broadcasting
      • 8.1.3 Digital Satellite Broadcasting
      • 8.1.4 Digital Broadcasting over Broadband Network
    • 8.2 On-Line Advertising in Hong Kong
      • 8.2.1 On-Line purchasing in Hong Kong
  • 9. Mobile Communications
    • 9.1 Overview of Hong Kong’s mobile market
      • 9.1.1 Mobile statistics
      • 9.1.2 Operator market shares
      • 9.1.3 Mobile Virtual Network Operator (MVNO) services
    • 9.2 Regulatory issues
      • 9.2.1 Mobile Number Portability (MNP)
      • 9.2.2 Spectrum licensing
      • 9.2.3 Personal Communications Services (PCS)
    • 9.3 Handsets
      • 9.3.1 iPhone
    • 9.4 Mobile voice services
      • 9.4.1 Prepaid
    • 9.5 Mobile data services
      • 9.5.1 Short Message Service (SMS)
      • 9.5.2 Wireless Application Protocol (WAP)
      • 9.5.3 Multimedia Message Service (MMS)
      • 9.5.4 High-Speed Circuit-Switched Data (HSCSD)
      • 9.5.5 General Packet Radio Service (GPRS)
      • 9.5.6 Enhanced Data for GSM Evolution (EDGE)
      • 9.5.7 High-Speed Downlink Packet Access (HSDPA)
      • 9.5.8 CDMA2000
    • 9.6 Third Generation (3G) mobile
      • 9.6.1 3G licensing
      • 9.6.2 3G launches
    • 9.7 4G
    • 9.8 Mobile content and applications
      • 9.8.1 Mobile TV
      • 9.8.2 Mobile content access
      • 9.8.3 Mobile music
  • 10. Forecasts
    • 10.1 Forecast fixed line subscribers – 2010; 2015; 2020
    • 10.2 Forecast mobile subscribers – 2010; 2015; 2020
  • 11. Glossary of Abbreviations
  • Table 1 – Country statistics Hong Kong – 2010
  • Table 2 – Telecommunications revenue and investment – 2009
  • Table 3 – Telephone network statistics – 2009
  • Table 4 – Internet statistics – 2009
  • Table 5 – Broadband statistics – 2009
  • Table 6 – Mobile statistics – 2009
  • Table 7 – National telecommunications authorities
  • Table 8 – Fixed line versus mobile subscriptions and penetration rates – 1998 - 2011
  • Table 9 – Hong Kong telecoms sector financial indicators – 1994 - 2009
  • Table 10 – Number of telecoms licences by category – January 2010
  • Table 11 – PCCW revenue and profit US$ – 2001 - 2009
  • Table 12 – PCCW exchange lines in service – 2008 - 2009
  • Table 13 – Sunday subscribers and annual change – 1998 - 2007
  • Table 14 – Sunday net profit/loss – 2000 - 2006
  • Table 15 – PCCW mobile revenue, EBITDA and net profit – 2005 - 2009
  • Table 16 – PCCW 2G and 3G subscribers – 2005 - 2009
  • Table 17 – City Telecom revenue and profit – 2001 - 2009
  • Table 18 – Hutchison total subscribers and annual change – 1998 - 2009
  • Table 19 – Hutchison Hong Kong 3G mobile subscribers and annual change – 2004 - 2010
  • Table 20 – HTIL Hong Kong and Macau revenue – 2002 - 2008
  • Table 21 – HTHKH revenue and profit – 2008 - 2009
  • Table 22 – HTHKH mobile subscribers – 2008 - 2009
  • Table 23 – iCable revenue and profit – 2005 - 2009
  • Table 24 – Wharf T&T fixed-line, i-Cable Broadband and Pay TV subscribers – 2001 - 2009
  • Table 25 – Hong Kong CSL subscribers and annual change – 1998 - 2006
  • Table 26 – New World Mobility subscribers and annual change – 1998 - 2005
  • Table 27 – CSL New World Mobility Group subscribers and annual change – 2006 - 2008
  • Table 28 – Peoples subscribers and annual change – 1998 - 2008
  • Table 29 – SmarTone subscribers and annual change – 1998 - 2009
  • Table 30 – SmarTone-Vodafone 3G subscribers – 2004 - 2009
  • Table 31 – SmarTone-Vodafone revenue and profit – 2002 - 2009
  • Table 32 – SmarTone-Vodafone ARPU and data contribution – 2002 - 2009
  • Table 33 – Fixed-lines in service and teledensity – 1990 - 2011
  • Table 34 – External telephone traffic volume in minutes – 1997 - 2009
  • Table 35 – External telecommunications facilities capacity of Hong Kong – 2000 - 2009
  • Table 36 – AsiaSat revenue, EBITDA and profit – 2005 - 2008
  • Table 37 – AsiaSat satellite utilisation – 2005 - 2009
  • Table 38 – AsiaSat sources of revenue by business segment – 2007 - 2008
  • Table 39 – APT Sat revenue and profit – 2001 - 2008
  • Table 40 – APT Sat satellite utilisation – 2003 - 2009
  • Table 41 – APT sources of revenue by business segment – 2007 - 2008
  • Table 42 – Broadcasting service statistics – February 2010
  • Table 43 – TV household penetration by licence type – 2009
  • Table 44 – TV channels provided by all TV licensees in Hong Kong – 2000 - 2009
  • Table 45 – Hong Kong households’ TV coverage by transmission modes – 2009
  • Table 46 – Pay TV subscribers – cable and ADSL – 2001 - 2009
  • Table 47 – Internet and broadband key statistics – 2009
  • Table 48 – Internet users and subscribers – 1996 - 2009
  • Table 49 – Internet subscribers by access type – 2009
  • Table 50 – Internet traffic volume (PSTN and broadband) – 1997 - 2010
  • Table 51 – Use of International Private Leased Circuits (IPLCs) – 2002 - 2009
  • Table 52 – Registered domain names – March 2010
  • Table 53 – BWA licence winners
  • Table 54 – Broadband Internet access subscribers – 2000 - 2011
  • Table 55 – Broadband subscribers by access type and annual change – 2009
  • Table 56 – Broadband subscribers and households - 2009
  • Table 57 – Broadband Internet traffic volume – 2000 - 2010
  • Table 58 – Cable subscribers – 2000 - 2009
  • Table 59 – DSL subscribers – 1999 - 2009
  • Table 60 – Broadband subscribers by operator – 2007 - 2009
  • Table 61 – i-Cable broadband and VoIP subscribers and penetration – 2000 - 2009
  • Table 62 – i-Cable cable TV subscribers, penetration and ARPU – 1995 - 2009
  • Table 63 – HKBN triple play subscribers, ARPU and IDD traffic volume – 2003 - 2009
  • Table 64 – PCCW broadband subscribers – 2000 - 2009
  • Table 65 – PCCW NOW TV subscribers and ARPU – 2003 - 2009
  • Table 66 – Pacific Internet subscribers by access type – 2003 - 2006
  • Table 67 – Online advertising activities in Hong Kong – 2008 - 2009
  • Table 68 – Top 10 online advertising brands in Hong Kong – Q4 2008
  • Table 69 – Online purchasing – 2009
  • Table 70 – Mobile subscribers and annual change – 1990 - 2011
  • Table 71 – Mobile data usage – 2002 - 2009
  • Table 72 – Mobile operators, technology, subscribers and annual change – March 2009
  • Table 73 – Operator market share by subscribers – 2003 - 2009
  • Table 74 – MVNO subscribers – 2005 - 2009
  • Table 75 – Total mobile numbers ported – 1999 - 2009
  • Table 76 – PCS subscribers and annual change – 1997 - 2008
  • Table 77 – Prepaid and activated SIM cards – 1997 - 2009
  • Table 78 – SMS messages sent and received – 2002 - 2009
  • Table 79 – SMS statistics for Christmas Day and New Years Day – 2005 - 2010
  • Table 80 – SMS statistics for Valentine’s Day and Chinese New Year Day – 2006 - 2010
  • Table 81 – 2.5G subscribers – 2002 - 2009
  • Table 82 – 3G mobile subscribers – 2005 - 2011
  • Table 83 – BWA Licence winners
  • Table 84 – Forecast fixed-line subscribers and penetration rate – lower market growth scenario – 2010; 2015; 2020
  • Table 85 – Forecast fixed-line subscribers and penetration rate – higher market growth scenario – 2010; 2015; 2020
  • Table 86 – Forecast mobile subscribers and penetration rate – lower market growth scenario – 2010; 2015; 2020
  • Table 87 – Forecast mobile subscribers and penetration rate – higher market growth scenario – 2010; 2015; 2020
  • Exhibit 1 – Licensees and issue dates for FTNS licences – February 2010
  • Exhibit 2 – The ‘original’ PCCW deal
  • Exhibit 3 – Fixed Telecommunications Network Services (FTNS) licensees – February 2010
  • Exhibit 4 – Major submarine cables with landing points in Hong Kong – 2008
  • Exhibit 5 – External FTNS licensees – October 2009
  • Exhibit 6 – Satellite-based external FTNS licensees – February 2010
  • Exhibit 7 – Overview of TV broadcasting licences – January 2010
  • Exhibit 8 – TV services receivable by broadcasting company – October 2009
  • Exhibit 9 – Transmission modes employed by TV licensees
  • Exhibit 10 – Mobile Virtual Network Operator licensees – 2009

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