2011 Hong Kong - Telecoms, Mobile, Broadband and Forecasts

Last updated: 12 Dec 2011 Update History

Report Status: Archived

Report Pages: 115

Analyst: Paul Budde

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Summary
Table Of Contents

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 (FttX, DSL, cable TV, wireless);
Convergence and digital media;
Forecasts.

Researcher:- Lisa Hulme-Jones
Current publication date:- December 2011 (17th Edition)

Executive Summary

Accelerated LTE and FttX deployments fuel a rising demand for data

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 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 and fixed telephone services at around 190% and 50% respectively. In addition to Hong Kong’s strong technology edge, its close geographical (and political) 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 significant number of strategically important submarine cables.

Hong Kong has moved quickly in providing 85% of all households with access to broadband connectivity. The number of broadband subscribers represents about 75% of the total internet subscriber base, supported by a large number of ISPs. 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 operators ready themselves for deploying LTE services. The market shows few signs of cooling and the cycle of a new technology and the subsequent battle for market share is about to begin again, even while 3G deployment has yet to reach its peak.

Key Highlights:

In a densely packed market has over 2 million TV households, there were over 1.2 million IPTV subscribers and over 1.1 million cable TV subscribers in Hong Kong by mid 2011.
3G subscriptions continue to grow in a competitive market and consisted of over 45% of total mobile subscribers towards end 2011.
A continued boom in mobile communications, in particular in mobile data is driving the need for additional spectrum. Total mobile data usage has witnessed an explosive growth with a year-on-year increase of 189% and on average each 2.5G and 3G subscriber sends 400Mbytes per month.
Fibre deployments continue to expand to over 50% of all broadband subscriptions and has resulted in Hong Kong becoming a world leader in terms of its broadband connection speed and competitive pricing.
Radio spectrum in the 678 - 686 MHz band for the provision of broadcast-type mobile TV services was successfully auctioned and awarded to China Mobile in June 2010.

Hong Kong – Key performance indicators – 2009 - 2011

Sector	2009	2010	2011 (e)
Internet subscribers (million)
Internet users	5.40	5.60	5.70
Internet subscribers	2.68	2.87	2.98
Broadband subscribers (million)
Total	2.03	2.12	2.14
FttX	0.74	1.10	1.25
Subscribers to Telecoms Services
Fixed-line telephone subscribers (million)	3.69	3.68	3.68
Mobile phone subscribers (million)	12.20	13.40	14.00
3G market share of mobile base	31%	39%	46%

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

Hong Kong’s market maturity and high penetration levels, resulting in the focus of operators to continue shifting from subscriber acquisition to subscriber retention, an effort to be pursued by increasing investment in service innovation.
The introduction of a program initiated by OFTA for the city’s five broadband providers to provide updates against quarterly performance pledges that are published on their websites.
OFTA’s introduction of a voluntary registration scheme for buildings with optical fibre access networks to promote further development of the broadband infrastructure in Hong Kong.
HKBN’s aims to be the largest ISP service provider in Hong Kong by 2016. The US$13 a month 100Mb/s symmetrical broadband offer, was followed by the introduction of a world leading 1Gb/s service at US$26 a month in April 2010.
Plans for an auction of 2.3GHz spectrum in the second half of 2011. The auction is for 90 MHz of spectrum in the 2.3 GHz band that was leftover from a 2009 auction.
The deployment in 2010 of DC HSPA+ solutions by PCCW and SmarTone allowing for peak downstream speeds up to 42Mb/s.
The start of commercial operations of the CSL LTE/DC-HSPA+ network in late 2010 for selected corporate customers and expansion to existing subscribers in 2011.
Plans by Hutchison (3) to rollout 4G Long Term Evolution (LTE) mobile broadband services in Hong Kong in late 2011.
The unsurprising survey results that show the lives of Hong Kong youth revolve around their digital gadgets, ranking first in owning such products when compared to their counterparts surveyed across Asia.

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

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
4. Regulatory Environment
- 4.1 Overview
- 4.2 OFTA (Office of the Telecommunications Authority)
- 4.3 Regulatory developments – 2000-2010
5. Fixed Network Market
- 5.1 Fixed-line and mobile phones
- 5.2 Fixed telecommunications services – background
  - 5.2.1 Fixed-line statistics by business and residential subscribers
  - 5.2.2 IP telephony statistics by business and residential subscribers
6. Major Operators
- 6.1 Pacific Century CyberWorks (PCCW)
  - 6.1.1 Company overview
  - 6.1.2 Company background
  - 6.1.3 Financial statistics
  - 6.1.4 Operations statistics
- 6.2 City Telecom (HK) Ltd (HKBN)
  - 6.2.1 Company overview
  - 6.2.2 Company background
  - 6.2.3 Financial statistics
- 6.3 Hutchison Telecom Hong Kong Holdings (HTHKH)
  - 6.3.1 Company overview
  - 6.3.2 Company background
  - 6.3.3 Financial statistics
  - 6.3.4 Operational statistics
- 6.4 Wharf T&T Hong Kong (i-Cable)
  - 6.4.1 Company overview
  - 6.4.2 Company background
  - 6.4.3 Financial statistics
  - 6.4.4 Operational statistics
- 6.5 New World Telecommunications Ltd
  - 6.5.1 Company overview
  - 6.5.2 Company background
  - 6.5.3 Financial statistics
  - 6.5.4 Operational statistics
- 6.6 Peoples (China Resources Peoples Telephone Co Ltd)
- 6.7 SmarTone-Vodafone
  - 6.7.1 Company overview
  - 6.7.2 Company background
  - 6.7.3 Financial statistics
  - 6.7.4 Operational statistics
7. Telecommunications Infrastructure
- 7.1 Submarine cable networks
8. Internet Market
- 8.1 Overview
- 8.2 Internet statistics
- 8.3 Internet traffic volume
- 8.4 Domain names
- 8.5 Internet contribution to GDP
9. Broadband Market
- 9.1 Background
- 9.2 Overview
- 9.3 Broadband statistics
- 9.4 Broadband performance pledges
- 9.5 Digital 21 IT Strategy
- 9.6 Broadband Survey results
  - 9.6.1 Saïd Business School
  - 9.6.2 Akamai Technologies
- 9.7 FttB/FttH building registration scheme
- 9.8 Broadband technologies
  - 9.8.1 Overview
  - 9.8.2 Cable modems
  - 9.8.3 Digital subscriber line (DSL)
  - 9.8.4 Fibre to the home (FttH)
  - 9.8.5 Wireless access
- 9.9 Major broadband operators
  - 9.9.1 i-Cable Communications (Hong Kong Cable Television Ltd)
  - 9.9.2 Hong Kong Broadband Network Services (City Telecom - CTInets)
  - 9.9.3 PCCW
  - 9.9.4 SmarTone Broadband Services
10. Digital Media / Digital Economy
- 10.1 Television broadcasting
  - 10.1.1 Overview
  - 10.1.2 Transmission modes
  - 10.1.3 Pay TV
  - 10.1.4 Free-to-air (FTA) television
- 10.2 Broadband television in Hong Kong
  - 10.2.1 Internet protocol TV (IPTV)
  - 10.2.2 Cable television (CATV)
11. Mobile Communications
- 11.1 Regulatory issues
  - 11.1.1 Mobile number portability (MNP)
  - 11.1.2 Spectrum licensing
- 11.2 Mobile technologies
  - 11.2.1 Analogue
  - 11.2.2 Telepoint CT-2
  - 11.2.3 GSM/2G
  - 11.2.4 Personal communications services (PCS)/2G
  - 11.2.5 High-speed circuit-switched data (HSCSD)
  - 11.2.6 General packet radio service (GPRS)
  - 11.2.7 Enhanced data for GSM evolution (EDGE)
  - 11.2.8 High-speed downlink packet access (HSDPA)
  - 11.2.9 CDMA
  - 11.2.10 CDMA2000
  - 11.2.11 Third Generation (3G) mobile
  - 11.2.12 LTE (Long-term evolution)/4G
- 11.3 Mobile virtual network operators (MVNO)
- 11.4 Mobile services
  - 11.4.1 Short message service (SMS)
  - 11.4.2 Mobile data usage
- 11.5 Mobile content
  - 11.5.1 Background
  - 11.5.2 Mobile phone versus smartphone usage
  - 11.5.3 Smartphones and tablets
  - 11.5.4 Mobile ratings in Hong Kong
  - 11.5.5 Mobile TV
  - 11.5.6 Mobile music
  - 11.5.7 Stock trading
- 11.6 Handsets
  - 11.6.1 iPhone
12. Forecasts
- 12.1 Forecast fixed line subscribers – 2010-2012; 2015
- 12.2 Forecast broadband subscribers: 2010-2012; 2016
- 12.3 Forecast total mobile and 3G subscribers – 2010-2012; 2016
- 12.4 Forecasting methodology
13. Glossary of Abbreviations

Table 1 – Country statistics Hong Kong – 2011
Table 2 – Telecommunications revenue and investment – 2010
Table 3 – Telephone network statistics – August 2011
Table 4 – Internet statistics – December 2010
Table 5 – Broadband statistics – December 2010
Table 6 – Mobile statistics – December 2010
Table 7 – National telecommunications authorities
Table 8 – Hong Kong telecoms service revenue and capex – 1994 - 2010
Table 9 – Number of telecoms licences by category – November 2011
Table 10 – Fixed line versus mobile subscriptions and penetration rates – 1998 - 2012
Table 11 – Fixed-line telephony subscribers – 2000 - 2011
Table 12 – External fixed-line telephone traffic volume in minutes – 1997 - 2010
Table 13 – IP telephony subscribers – 2007 - 2011
Table 14 – PCCW consolidated revenue, EBITDA and profit US$ – 2001 - 2010
Table 15 – PCCW core revenue US$ – 2006 - 2010
Table 16 – PCCW TSS revenue US$ – 2008 - 2010
Table 17 – PCCW mobile revenue and EBITDA – 2005 - 2010
Table 18 – PCCW exchange lines in service – 2003 - 2011
Table 19 – PCCW 2G and 3G subscribers – 2005 - 2011
Table 20 – PCCW 3G and blended ARPU – 2007 – 2011
Table 21 – City Telecom revenue and profit – 2001 – 2011
Table 22 – HTHKH revenue and profit – 2006 – 2010
Table 23 – HTHKH mobile service revenue for data, voice, roaming – 2009 – 2010
Table 24 – Hutchison mobile subscribers and annual change – 1998 – 2011
Table 25 – Hutchison 3G mobile subscribers and annual change – 2004 - 2008
Table 26 – HTHKH mobile subscribers 2G and 3G postpaid and total - 2008 - 2011
Table 27 – Hutchison postpaid ARPU – 2009 - 2011
Table 28 – i-Cable revenue and profit – 2005 - 2010
Table 29 – Wharf T&T fixed-line, i-Cable broadband and pay TV subscribers – 2001 - 2011
Table 30 – Hong Kong CSL subscribers and annual change – 1998 - 2005
Table 31 – New World Mobility subscribers and annual change – 1998 - 2005
Table 32 – CSL New World subscribers and annual change – 2006 - 2011
Table 33 – Peoples (China Mobile Hong Kong) subscribers and annual change – 1998 - 2011
Table 34 – SmarTone-Vodafone revenue and profit – 2002 - 2011
Table 35 – SmarTone-Vodafone ARPU and data contribution – 2002 - 2011
Table 36 – SmarTone subscribers and annual change – 1998 - 2011
Table 37 – SmarTone-Vodafone 3G subscribers – 2004 - 2011
Table 38 – External telecommunications facilities capacity of Hong Kong – 2000 - 2011
Table 39 – Internet users and subscribers – 1996 - 2012
Table 40 – Internet traffic volume (PSTN and broadband) – 1997 - 2010
Table 41 – Use of international private leased circuits (IPLCs) – 2002 - 2011
Table 42 – Registered domain names – 2004 - 2011
Table 43 – Broadband internet access subscribers – 2000 - 2012
Table 44 – Narrowband internet access subscribers – 2000 - 2011
Table 45 – Prepaid and leased line internet access subscribers – 2000 - 2011
Table 46 – Broadband subscribers and households – February 2011
Table 47 – Broadband internet traffic volume – 2000 - 2010
Table 48 – Broadband performance pledges – Q1 2011
Table 49 – Digital 21 Strategy – key indicators – May 2011
Table 50 – Broadband ranking evolution top 10 countries – 2008 - 2010
Table 51 – Broadband subscribers by operator – 2007 - 2010
Table 52 – Cable modem internet subscribers – 2000 - 2012
Table 53 – DSL subscribers – 1999 - 2012
Table 54 – FttX subscribers – 2007 - 2012
Table 55 – i-Cable broadband and VoIP subscribers and penetration – 2000 - 2010
Table 56 – i-Cable cable TV subscribers, penetration and ARPU – 1995 - 2010
Table 57 – HKBN triple play subscribers, ARPU and IDD traffic volume – 2003 - 2011
Table 58 – PCCW broadband subscribers – 2000 - 2011
Table 59 – PCCW NOW TV subscribers and ARPU – 2003 - 2011
Table 60 – Broadcasting service statistics – March 2011
Table 61 – TV household penetration by licence type – December 2009
Table 62 – TV channels provided by all TV licensees in Hong Kong – 2000 - 2010
Table 63 – Hong Kong households’ TV coverage by transmission modes – December 2009
Table 64 – Digital terrestrial television population coverage – 2007 - 2010
Table 65 – Pay TV subscribers – 2000 - 2010
Table 66 – IPTV subscribers – 2003 - 2010
Table 67 – Cable television subscribers – 2000 - 2010
Table 68 – Total mobile numbers ported – 1999 - 2010
Table 69 – Analogue subscribers and annual change – 1984 - 1997
Table 70 – GSM 2G subscribers and annual change – 1993 - 2011
Table 71 – PCS subscribers and annual change – 1997 - 2008
Table 72 – 2.5G subscribers – 2002 - 2011
Table 73 – 3G mobile subscribers – 2005 - 2012
Table 74 – MVNO subscribers – 2005 - 2011
Table 75 – SMS messages sent and received – 2002 - 2010
Table 76 – SMS statistics for Christmas Day and New Years Day – 2005 - 2011
Table 77 – SMS statistics for Valentine’s Day and Chinese New Year Day – 2006 - 2011
Table 78 – Mobile data usage – 2002 – 2011
Table 79 – Forecast fixed-line subscribers and penetration - higher band – 2010 - 2012; 2015
Table 80 – Forecast fixed-line subscribers and penetration - lower band – 2010 - 2012; 2015
Table 81 – Forecast broadband subscribers and penetration - lower band: 2010 - 2012; 2016
Table 82 – Forecast broadband subscribers and penetration - higher band: 2010 - 2012; 2016
Table 83 – Forecast mobile subscribers and penetration higher band forecast – 2010 - 2012; 2016
Table 84 – Forecast mobile subscribers and penetration lower band forecast – 2010 - 2012; 2016

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

Exhibit 1 – Map of Hong Kong
Exhibit 2 – Licensees and issue dates – May 2011
Exhibit 3 – Major operators by service type - 2011
Exhibit 4 – PCCW at a glance – December 2010
Exhibit 5 – The ‘original’ PCCW deal
Exhibit 6 – City Telecom at a glance – December 2010
Exhibit 7 – HTHKH at a glance – December 2010
Exhibit 8 – HTHKH frequency allocations – June 2011
Exhibit 9 – iCable at a glance – December 2010
Exhibit 10 – CSL New World at a glance – June 2010
Exhibit 11 – SmarTone Vodafone at a glance – December 2010
Exhibit 12 – Major submarine cables with landing points in Hong Kong – 2011
Exhibit 13 –TV broadcasting licensees – March 2011
Exhibit 14 – Transmission modes employed by TV licensees
Exhibit 15 – Mobile virtual network operator licensees – May 2011
Exhibit 16 – Top 10 activities on mobile phones versus smartphones – 2010

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