Views expressed
are those of the
author and may
not reflect opinion
of ITU, its
members or the
government of the
Hong Kong Special
Administrative
Region of the
People’s Republic
of China
For brevity, Hong
Kong Special
Administrative
Region of the
People’s Republic
of China is referred
to as Hong Kong in
this presentation
Contents
• Factors for Hong Kong’s broadband
success
• Broadband statistical analysis
Reasons for Hong Kong’s success
Top five economies by broadband
subscribers per 100 inhabitants, 2002
• Geography
– Essentially large city
– 95% live in apartments
• Sophistication
– On Internet over 11 years
– 46% of 10+ population use
Internet at least once a
month
• Wealth
– GDP per capita of
US$25’920 (12th highest in
world)
• Competition
– 15 broadband suppliers
Korea
(Rep.)
21.3
Hong
Kong
Canada
14.6
11.5
Taiwan,
China
9.4
Iceland
8.6
Source: ITU World Telecommunication Indicators
Database.
Geography
• Small, compact size
and fact that 95% of
population lives in
apartments makes
Hong Kong easy to
wire for
communications
• As a result, high
coverage for
availability of
broadband services
Broadband coverage, Hong Kong, June 2002
Cable modem
1.8 m, 85%
LMDS
0.95 million
45%
Total households
2.1 million
ADSL
2 million, 95%
Sophistication
• Online since 1991
• Among most intense Internet
users in world
• This drives demand for highspeed access
• One of first economies to
launch broadband in May
1998.
• Biggest reason for broadband
demand appears to be
convenience (no need for 2nd
telephone line, always on)
rather than sophistication of
applications
Hours of Internet use per month,
July 2000
Korea
(Rep.)
Hong
Kong
19:20
12:12
Japan
09:27
Singapore
08:48
Taiwan,
China
08:04
Australia
07:41
New
Zealand
06:59
Source: ITU adapted from Nielsen//NetRatings.
Wealth
ADSL prices
December 2002, US$
151
Monthly fee
116
Price per Mbps
51
68
Taiwan, China
Source: ITU adapted from company reports.
Sing-apore
22
43
Aust-ralia
12
15
20
27
Korea (Rep.)
36
Japan
35
New Zealand
38
41
Hong Kong
• Relatively affluent
• Majority can afford a
broadband subscription
• Broadband pricing lowest
in region
• Broadband mainly seen
as substitute for 2nd line
• Free local calls but not
Internet dial-up
Competition
• Regulation
– Local loop unbundling mandated
– Regulator ready to act if market
negotiations fail
– Fixed line incumbent has 24%
wholesale DSL lines compared to
EU average of 16%
• Variety of operators and
technologies
– Technologies
•
•
•
•
•
DSL
Cable modem
Fixed wireless / LAN
Fibre optic
WLAN (> 1’600 hotspots)
– 15 Providers
•
•
•
•
4 fixed
5 fixed wireless
1 cable TV
5 ISP resellers
Often seems to be a third player that has an impact on
broadband. Hong Kong Broadband Network is The
Third Man. Using fixed wireless to interconnect
buildings; Ethernet wiring within buildings
Broadband as a commodity
It is unlikely that there is this degree of broadband competition anywhere else in the
world. There are 15 retail broadband providers in Hong Kong, resulting in intense
competition for potential customers.
As one broadband provider notes:
“Competition is expected to be
keener this year as the marketplace
approaches commoditisation.” This
commoditisation is reflected in
stands set up in the street to hawk
broadband Internet access as if it
was apples or oranges. In order to
entice potential users, providers
offer everything from toasters to
stereo equipment. In Hong Kong,
broadband is no longer perceived as
a luxury but a mass-market product.
“Hawkers” selling broadband access.
More work is needed to develop
Wanchai Computer Centre, Hong Kong
broadband applications and to
December 2002
entice users to use them.
Once that happens, then Hong Kong will have transitioned from a broadband market
to a broadband society.
Statistical analysis
MARKET DEMAND
• Households
– With PC
– With Internet access
– With broadband
subscription
• Broadband coverage
• Price of broadband
subscription
+ operator
reports
BROADBAND ANALYSIS
• Total broadband
subscribers
– By subscriber:
• Residential subscribers
• Business subscribers
– By technology
• DSL
• Cable modem
• Other
• Total Internet subscribers
Demand analysis
53.1%
No need
70%
Households with PCs
22.1%
Planning
20.2%
Expensive
Prevent
children
Lack
skills
60%
50%
15.5%
13.4%
Reasons for
no Internet
connection
40%
Type of connection
30%
48.7%
20%
52.5%
Broadband
68.2%
36.4%
10%
11.8%
Connected to the
Internet
0%
1998
2000
2001
Telephone
line
33.7%
Multiple
answers
allowed
2002
Source: ITU adapted from Census & Statistics Department, “Thematic Household Survey Report No. 10,
Information Technology Usage and Penetration”.
Broadband analysis
Dial-up
58.0%
Broadband
41.8%
Internet
subscribers
by type,
12/02
Broadband
accounts by
type, 12/02
Households
92.6%
Leased
line
0.1%
Others
0.3%
Offices
7.1%
Broadband traffic, terabits
Nov-02
Aug-02
May-02
Feb-02
Nov-01
Aug-01
May-01
10'000
0
Feb-01
Other
21%
Broadband
accounts by
technology,
12/02
30'000
20'000
Nov-00
DSL
56%
Cable
modem
23%
Source: ITU adapted from Office of Telecommunication Authority (OFTA) and PCCW, i-Cable reports.
For questions about this report:
Michael.Minges@itu.int
For other studies in the series, see:
www.itu.int/ITU-D/ict/cs/