2017 Hong Kong - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses

Hong Kong Paves the Way for 5G Services

Consistent with its status as one of the leading telecommunications economies in the world, Hong Kong has built world-class telecom infrastructure and has developed one of the most dynamic telecommunications markets in the world. The small size and high population density has meant the country is extensively wired with optical fibre which now represents the majority of fixed broadband connections. International internet connectivity in the form of strategically important submarine cables continues to grow, driven by Hong Kong’s status as an international financial hub and its location next to China.

Mobile broadband services are widely supported through deployment of competing HSPA/LTE networks, with approximately three quarters of the population owning a smartphone and connecting to 3G and 4G LTE networks with connectivity complimented by WiFi. Operators have also focused on mobile content and applications to improve customer loyalty and incrementally increase ARPU.

Supported by widely accessible, fast and affordable fixed and mobile broadband, Hong Kong has developed into a digital economy to improve socioeconomic development. Technology has been utilised to improve the quality, accessibility and affordability of commerce, government services, healthcare, education and utilities.

Hong Kong has implemented a strategy to facilitate the development of data centres and Hong Kong continues to expand international connectivity through new submarine cables.

Hong Kong possesses a small but well developed market comprised of four highly competitive mobile operators and a number of Mobile Virtual Network Operators (MVNOs). A highly saturated market means revenue growth is largely dependent on increasing ARPU or enticing customers from competitors through aggressive sales and marketing tactics.

Future investments will focus on increasing network capacity and speed through combining TDD and FDD LTE platforms as well as shifting investment from 3G to LTE as end users upgrade from 3G to LTE handsets. During 2017 a number of Hong Kong Mobile Operators began paving the way for the introduction of 5G services.

The extensive roll-out of fixed broadband infrastructure has allowed Hong Kong to provide almost all households with access to high-speed broadband connectivity. Deployments by competing operators have resulted in strong competition, driving rapid growth in broadband subscriptions to levels approaching saturation. Not surprisingly investment has focused on fibre access networks due to inherent advantage of fibre access networks over competing platforms such as DSL or HFC, especially in the geographically compact territory of Hong Kong.

One of the earliest and biggest adopters of technology has been Hong Kong’s digital media industry. Starting with terrestrial and cable networks, access to digital media is now possible through fixed and mobile broadband networks. Increasing disaggregation between content providers and distributors has allowed OTT video and music providers, both legal and illegal, to flourish in Hong Kong.

Key developments:

• PCCW Global entered into an agreement with Singapore-based Keppel Data Centres to co-develop a new international carrier exchange facility in Hong Kong.
• HKBN purchased NWT, which offers a range of fixed line and broadband services in both the business and consumer segments.
• Wharf T&T announced plans for an expansion during 2017.
• SmarTone conducted Hong Kong’s first demonstration of 5G technology using millimetre wave (mmWave) spectrum.
• 3 Hong Kong is working with Huawei to prepare for future introduction of 5G services.
• China Mobile Hong Kong successfully migrated its legacy networks to a cloud core network to prepare the way for future 5G services.
• China Mobile Hong Kong contracted Huawei to deploy an LTE-Advanced Pro 4.5G network as it moves towards a 5G future.
• Operators are focusing on WiFi to improve network capacity by complementing existing 3G/LTE mobile broadband networks;
• Increased activity in the setting up and offering of cloud services.

Companies mentioned in this report:

PCCW; HKT; CSL; Hong Kong Broadband Network (HKBN); Hutchison Telecom Hong Kong, i-Cable; SmarTone, Vodafone, China Mobile, China Mobile HK, CITIC Telecom.