For brevity, Hong Kong Special Administrative Region of the People s Republic of China is referred to as Hong Kong in this presentation
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1 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
2 Contents Factors for Hong Kong s broadband success Broadband statistical analysis
3 Reasons for Hong Kong s success 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$ (12 th highest in world) Competition 15 broadband suppliers Top five economies by broadband subscribers per 100 inhabitants, 2002 Korea (Rep.) Hong Kong Canada Taiwan, China Iceland Source: ITU World Telecommunication Indicators Database.
4 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%
5 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 Biggest reason for broadband demand appears to be convenience (no need for 2 nd telephone line, always on) rather than sophistication of applications Hours of Internet use per month, July 2000 Korea (Rep.) Hong Kong Japan Singapore Taiwan, China Australia New Zealand 12:12 09:27 08:48 08:04 07:41 06:59 19:20 Source: ITU adapted from Nielsen//NetRatings.
6 Wealth Relatively affluent Majority can afford a broadband subscription Broadband pricing lowest in region Broadband mainly seen as substitute for 2 nd line ADSL prices December 2002, US$ Monthly fee Price per Mbps Free local calls but not Internet dial-up Hong Kong New Zealand Japan Korea (Rep.) Taiwan, China Aust-ralia Sing-apore Source: ITU adapted from company reports.
7 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 (> hotspots) 15 Providers 4 fixed 5 fixed wireless 1 cable TV 5 ISP resellers Competition 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
8 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. More work is needed to develop broadband applications and to Hawkers selling broadband access. Wanchai Computer Centre, Hong Kong December 2002 entice users to use them. Once that happens, then Hong Kong will have transitioned from a broadband market to a broadband society.
9 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
10 Demand analysis No need 53.1% 70% 60% 50% Households with PCs Planning Expensive Prevent children Lack skills 22.1% 20.2% 15.5% 13.4% Reasons for no Internet connection 40% 30% 20% 10% 0% 11.8% 36.4% 48.7% 52.5% Connected to the Internet Broadband Telephone line Type of connection 33.7% 68.2% Multiple answers allowed Source: ITU adapted from Census & Statistics Department, Thematic Household Survey Report No. 10, Information Technology Usage and Penetration.
11 Broadband analysis Broadband 41.8% Dial-up 58.0% Leased line 0.1% Internet subscribers by type, 12/02 Households 92.6% Broadband accounts by type, 12/02 Offices 7.1% Others 0.3% DSL 56% Cable modem 23% Other 21% Broadband accounts by technology, 12/02 Broadband traffic, terabits 30'000 20'000 10'000 0 Nov-00 Feb-01 May-01 Aug-01 Nov-01 Feb-02 May-02 Aug-02 Nov-02 Source: ITU adapted from Office of Telecommunication Authority (OFTA) and PCCW, i-cable reports.
12 For questions about this report: For other studies in the series, see:
International Telecommunication Union
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