Hong Kong’s Fibre Broadband Market - Busting the Myth of Residential Fibre Broadband always being a Natural Monopoly
Main Article Content
Keywords
Telecommunications, Broadband, Fibre to the Premises, Hong Kong, Infrastructure competition, Natural Monopoly, Universal Service Obligation
Abstract
Hong Kong has been long recognised as a leading global city when it comes to fixed broadband performance. Unlike many other leading broadband markets, this has occurred without any financial support from the Hong Kong government. The removal, rather than an increase, of regulation of the privately owned broadband network operators has been the overwhelming main driver of this outcome. The key factors driving this outcome have been an open market with low barriers to entry, aggressive competition between network operators, low network build costs and innovative marketing to stimulate demand for higher speed broadband service. The successful rollout of profitable competing Fibre to the Premises (FTTP) across the city demonstrates that fibre networks are not always and everywhere utility style natural monopolies. However, the lack of a universal service obligation for broadband does also mean that households and businesses in areas where competition is neither technically nor economically feasible has resulted in approximately 10% to 15% of Hong Kong households not benefiting from this policy.
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TeleGeography. (2007). PCCW direct fibre available to two-thirds of homes, launches fibre/wireless/HDTV packages. Retrieved from https://www.telegeography.com/products/commsupdate/articles/2007/11/27/pccw-direct-fibre-available-to-two-thirds-of-homes-launches-fibrewirelesshdtv-packages/index.html
City Telecom (H.K.) Limited. (2011). Fibre Wonderland: Network for Our Next Generation – Presentation to Media Convergence Conference 7 March 2011. Retrieved from http://ir.hktv.com.hk/eng/ir/presentations/pre110307.pdf
Hong Kong Broadband Network Limited. (2008). Sharing HKBN’s experience of developing a future-proof NGN architecture, 17. Retrieved from http://ir.hktv.com.hk/eng/ir/presentations/pre0803a.pdf
Hong Kong Broadband Network Limited. (2015). Press Release 2 June 2015 - KBN expands its Fibre Optic Network Coverage into Rural Areas and Village Houses. Retrieved from http://reg.hkbn.net/WwwCMS/upload/pdf/en/20150602_HKBN_network expansion_Eng_Final.pdf
Hong Kong Legislative Council. (2004). Review of Type II Interconnection Policy, paragraph 19. Retrieved from http://www.cedb.gov.hk/ccib/eng/legco/pdf/typeII.pdf
Hutchison Telecom Hong Kong Holdings. (2010). Press release 20 August 2010 – 3ree Broadband Launches 1000M Residential Broadband Service. Retrieved from http://www.hgc.com.hk/HGCImages/en/pressPdf/p100820.pdf
Hutchison Telecom Hong Kong Holdings. (2009). Introduction of the Entire Issued Share Capital of the Company of the Main Board of the Stock Exchange of Hong Kong Limited. 71. Retrieved from http://file.irasia.com/listco/hk/hthkh/listingdoc/l090419.pdf
OEDC. (1996). Policy Roundtables, The Essential Facilities Concept. Retrieved from http://www.oecd.org/competition/abuse/1920021.pdf
Office of the Communications Authority. (2017). Universal Service Obligation (USO) and Service Coverage. Retrieved from http://www.ofca.gov.hk/en/consumer_focus/education_corner/guide/advice_lfs/uso/index.html
Office of the Telecommunications Authority. (2004). Review of Type II Interconnection Policy – Press Conference (Slides), 10. Retrieved from http://tel_archives.ofca.gov.hk/en/speech-presentation/ofta_20040706.pdf
Office of the Telecommunications Authority. (Dec 2003). Review of Regulatory Policy for Type II Interconnection. Analysis of Comments Received, Preliminary Conclusions and Further Considerations. Retrieved from http://tel_archives.ofca.gov.hk/en/report-paper-guide/paper/consultation/20031216_typeII.pdf
Office of the Telecommunications Authority. (Jul 2008). Press Release – Genuine Choice of Fixed Network Operators Demonstrates Success of the Type II Interconnection Policy – 3 July 2008. Retrieved from http://tel_archives.ofca.gov.hk/en/press_rel/2008/Jul_2008_r1.html
Office of the Telecommunications Authority. (Jul 2008). Withdrawal of Mandatory Type II Interconnection – Statement of the Telecommunications Authority – 3 July 2008. Retrieved from http://tel_archives.ofca.gov.hk/en/tas/interconnect/tas20080703.pdf
Office of the Telecommunications Authority. (May 2003). Review of Regulatory Policy for Type II Interconnection – Consultation Paper – 23 May 2003, 5. Retrieved from http://tel_archives.ofca.gov.hk/en/report-paper-guide/paper/consultation/cp20030523.pdf
South China Morning Post. (2015). Article published 14 September 2015 - The service keeps cutting out': Angry residents of Hong Kong's outlying islands bemoan PCCW's 'dismal' broadband speeds. Retrieved from http://www.scmp.com/news/hong-kong/economy/article/1857877/digitial-dark-age-residents-hong-kongs-outlying-islands
South China Morning Post. (2015). Article published 17 October 2015 - Hong Kong's 'digital divide' forcing many to turn their back on laidback Lamma. Retrieved from http://www.scmp.com/news/hong-kong/education-community/article/1868724/hong-kongs-digital-divide-forcing-many-turn-their
South China Morning Post. (2015). Article published 24 October 2015 - Slow to act: Hong Kong government is the real laggard when it comes to improving broadband speeds for all. Retrieved from http://www.scmp.com/comment/insight-opinion/article/1871355/slow-act-hong-kong-government-real-laggard-when-it-comes
South China Morning Post. (2007). HKBN offers fibre link broadband for homes – publication date 2 October 2007. Retrieved from http://www.scmp.com/article/609921/hkbn-offers-fibre-link-broadband-homes
Spectrum Strategy Consultants. (2003). Report on the Effectiveness of Competition in Hong Kong’s Telecommunications Market : An International Comparison, 20. Retrieved from http://tel_archives.ofca.gov.hk/en/report-paper-guide/report/rp20030620.pdf
TeleGeography. (2008). i-Cable net profit falls 78%. Retrieved from https://www.telegeography.com/products/commsupdate/articles/2008/08/13/i-cable-net-profits-fall-78/index.html
TeleGeography. (2007). PCCW direct fibre available to two-thirds of homes, launches fibre/wireless/HDTV packages. Retrieved from https://www.telegeography.com/products/commsupdate/articles/2007/11/27/pccw-direct-fibre-available-to-two-thirds-of-homes-launches-fibrewirelesshdtv-packages/index.html
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Published
Sep 13, 2017
Article Details
How to Cite
McLaren, G. (2017). Hong Kong’s Fibre Broadband Market - Busting the Myth of Residential Fibre Broadband always being a Natural Monopoly. Journal of Telecommunications and the Digital Economy, 5(3), 36–49. https://doi.org/10.18080/jtde.v5n3.117
Issue
Section
Industry Case Study
Copyright Telecommunications Association Inc.
Author Biography
Gary McLaren, McLaren Williams Consulting
Gary McLaren has over 25 years experience in the telecommunications industry. After senior roles at both Telstra and Siemens in the 1990s, Gary joined RequestDSL, Australia’s first DSL unbundled local loop carrier in 2000. In 2004, RequestDSL was merged with PowerTel by their common venture capital owner Telecom Venture Group. From 2005 to 2007, Gary provided management consulting services to AAPT and developed a startup business within AAPT called IProvide which focused on building AAPT’s SME business. In parallel, Gary also held executive director roles with Utiba, a mobile payments startup focused on the South East Asian market. Utiba was sold to Amdocs in 2013 for approximately $US25 million.In 2009, Gary was appointed Chief Technology Officer of NBN Co and was responsible for developing and implementing the network architecture, design and integration of the NBN. He was directly involved in the negotiations of the industry restructuring deal between NBN Co and Telstra and responsible for NBN Co’s network technology procurement worth over $A7 billion.
Gary left NBN Co in mid-2014 and is now re-connecting with the Australian startup tech sector as both an angel investor and experienced mentor/executive to assist the growth of Australia’s entrepreneurial ICT sector. He recently became Vice President of TelSoc, Australia’s society for the advancement of telecommunications and the digital economy.
Gary has degrees from Melbourne University in Engineering and Law and is an Honorary Fellow of Melbourne University.
