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2008 Asia - Telecoms, Mobile and Broadband in Hong Kong and Macau

Hong Kong and Macau are countries with sophisticated telecommunications infrastructure. The report covers trends and developments in telecommunications, mobile, Internet, broadband, and converging media including VoIP and IPTV.

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 (FttH, DSL, cable TV, wireless);
  • Convergence and Digital Media.


Hong Kong, a Special Administrative Region (SAR) of China, takes pride in the way it has built one of the most sophisticated telecommunications markets in the world. Hong Kong’s regulator, the Office of the Telecommunications Authority, 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 phones and telephone services.

By early 2008, the territory had more than 3.8 million fixed telephone lines in service, giving a 95% fixed-line household penetration rate and 53% fixed-line population penetration rate, among the highest in Asia as well as in the world. As a result of open competition in the local FTNS market and government’s withdrawal of its mandatory Type II interconnection policy, over 80% of residential households are able to enjoy an alternative choice of local fixed network operators. Furthermore, PCCW has a universal service obligation to provide a continuous basic service, including the provision of public switched voice telephone services anywhere in Hong Kong in a reasonable period of time.

Hong Kong has moved quickly in providing around 75% of all households with access to broadband connectivity. This has been accompanied by rapid growth in the Internet market. Broadband Internet subscriptions well and truly surpassed dial-up subscriptions by end-2005. There were in excess of 4.8 million Internet users in the territory, gaining access using either dial-up or broadband, going into 2008. The number of broadband subscribers represented about 67% of the total Internet subscriber base, supported by a large number of ISPs. By December 2007, according to OFTA, Hong Kong’s Internet subscriber base consisted of 1.88 million broadband subscribers and 960,000 dial-up subscribers. Broadband ARPU levels were increasing, as operators benefited from lower churn and higher revenue due to good quality content.

Going into 2008, based on OFTA data, there were an amazing 10.588 million mobile subscribers, representing an impressive penetration of over 152%. This included over 2.7 million 2.5G and 3G subscribers. This penetration level puts Hong Kong in a tussle with Macau for first place in the Asian mobile market (both now well ahead of previous leader, Taiwan). This is remarkable considering that Hong Kong not only has the highest density of fixed telephone lines in the region but also that local calls on the fixed network are free. An ongoing price war cut mobile phone air-time rates to levels where operators became increasingly reliant on provision of non-voice value-added services to maintain margins; this, in turn, made 2.5G and 3G services of considerable importance.

Macau, a SAR of China, remains very low profile compared with its bustling sister SAR, Hong Kong. It has however quietly built itself a strong modern telecoms infrastructure. While fixed lines reached an effective saturation point a few years ago, the country’s mobile market has been growing strongly and had become one of the most highly penetrated in the world - 151% by the start of 2008. Macau has been busy adopting the Internet and by January 2008, over 94% of all Internet subscriptions were broadband based, mainly using DSL.

Key highlights:

  • In October 2007 OFTA awarded a 15-year licence to PCCW for the CDMA2000 licence in the 850MHz band. PCCW can provide CDMA 2000 services after 20 November 2008, and will construct the new network during the intervening period.
  • After being awarded a 3G licence for WCDMA in 2006, in October 2007 Hutchison (Macau) launched its 3G network deploying WCDMA technology to roll out a 3.6Mb/s HSDPA broadband network.
  • In June 2007 China Unicom won a licence to provide services based on the alternative 3G standard CDMA2000 1x EV-DO. The company launched its 3G network in Macau in October 2007.
  • In November 2007 HKBN began deploying what it claims to be Hong Kong’s first Gigabit Passive Optical Network. HKBN claimed it had turned traditionally cost prohibitive FttH technology into affordable mass-deployed residential service at a HK$48.50 service fee for its 100Mb/s service, progressing to HK$215 1Gb/s.
  • In December 2007 the Telecommunications Authority announced the decision to auction spectrum for the provision of broadband wireless access services in the 2.3-2.4GHz and the 2.5-2.69GHz band by October 2008. Operators are expected to launch services in 2009.
  • In a densely packed market that has an estimated 2.3 million TV households, PCCW ended 2007 with 882,000 video subscribers in Hong Kong with a paying base of 628,000. That still put it within striking range of i-Cable, which closed 2007 with 882,000 video subscribers. Besides losing its historic market share edge, i-Cable may also start shedding subscribers. This has PCCW stealing away cable customers in a highly competitive market considered one of the most mature and saturated in the world.
Hong Kong Internet, broadband, and telecoms statistics - 2002 - 2007
Sector 2002 2003 2004 2005 2006 2007
Internet (million)
Internet users 3.30 3.50 3.80 4.10 4.30 4.88
Internet subscribers 2.37 2.34 2.52 2.57 2.69 2.84
Broadband (million)
DSL subscribers 0.49 0.64 0.79 0.91 0.98 1.08
Total subscribers 0.99 1.23 1.46 1.65 1.81 1.88
Subscribers to telecoms services (million)
Subscriber fixed telephones 3.84 3.82 3.78 3.79 3.83 3.72
Total mobile phones 6.21 7.19 8.16 8.54 9.44 10.58
2.5G 0.17 0.73 1.35 1.21 0.87 0.74
3G - - - 0.63 1.33 2.00
(Source: BuddeComm based on OFTA, ITU, Point Topic data)

For those needing high level strategic analysis and objective analysis on Hong Kong and Macau, this report is essential reading and provides further information on:
  • Updated rules by OFTA governing USF payments for the provision of basic telephone service. PCCW, the only universal service provider, has been compensated under the universal service contribution scheme for the net cost of providing universal service to unprofitable customers. Under the new rules, the compensation can now be shared by telecoms service providers who meet certain criteria. The authority also updated the methodology for calculating the universal service cost. The changes took effect from July 2007.
  • An expectation that TD-SCDMA mobile technology developed in China will eventually enter Hong Kong’s market once the Chinese government awards 3G licences. However, TD-SCDMA will face strong competition from other technologies in such mature markets as Hong Kong.
  • Approval by the Hong Kong Legislative Council for a multi-million program to provide wireless Internet services in government premises for improving Internet services. Under the program, WiFi facilities are to be set up at about 350 government premises for free use by the public, and will complement other WiFi initiatives in the private sector. There were over 6,500 public WiFi access points by March 2008.
  • The announcement of an operational merger between Pacific Internet Hong Kong and Asia Netcom in January 2008.
  • HTIL’s completed sale in May 2007, of its 67% stake in Hutchison Essar Ltd in India to UK-based Vodafone Group PLC, thus ending HTIL’s participation in the Indian market.
Data in this report is the latest available at the time of preparation and may not be for the current year.

1. Hong Kong
1.1 Key statistics
1.2 Telecommunications market
1.2.1 Overview of Hong Kong’s telecom market
1.2.2 Fixed Telecommunications Network Services (FTNS)
1.2.3 International telecommunications services
1.3 Regulatory environment
1.3.1 Overview
1.3.2 Regulatory authority
1.3.3 Survey of effectiveness of competition
1.3.4 Telecom sector liberalisation
1.3.5 Awarding of licences
1.3.6 Telecommunication (Amendment) Ordinance 2000
1.3.7 Telecommunications (Amendment) Bill 2001
1.3.8 Regulatory developments
1.3.9 Proposed ‘Super Regulator’
1.4 Major fixed network operators in Hong Kong
1.4.1 Pacific Century CyberWorks
1.4.2 City Telecom (HK) Ltd
1.4.3 Hutchison Whampoa Ltd
1.4.4 Wharf T&T Hong Kong
1.4.5 New World Telecommunications Ltd (formerly New World Telephone)
1.4.6 Pacific Internet Hong Kong
1.5 Telecommunications infrastructure
1.5.1 Overview
1.5.2 Mainland connection
1.5.3 National infrastructure
1.5.4 Full liberalisation of FTNS market
1.5.5 Submarine cable networks
1.5.6 Satellite networks
1.6 Broadband market
1.6.1 Overview
1.6.2 Regulatory issues
1.6.3 Broadband statistics
1.6.4 Internet market
1.6.5 Wireless Internet
1.6.6 Cable modems
1.6.7 Digital Subscriber Line (DSL)
1.6.8 Major broadband operators
1.7 E-services
1.7.1 E-commerce
1.7.2 E-government
1.7.3 E-entertainment
1.8 Convergence
1.8.1 Overview of media convergence
1.8.2 Key general trends
1.8.3 Regulatory issues
1.8.4 Voice over Internet Protocol (VoIP)
1.8.5 Triple play models
1.8.6 Quadruple play models
1.8.7 Digital TV
1.9 Mobile communications
1.9.1 Overview of Hong Kong’s mobile market
1.9.2 Regulatory issues
1.9.3 Mobile technologies
1.9.4 Major mobile operators
1.9.5 Mobile voice services
1.9.6 Mobile data services
1.9.7 Mobile content and applications
2. Macau
2.1 Key statistics
2.2 Telecommunications market
2.2.1 Overview of Macau’s telecom market
2.3 Regulatory environment
2.3.1 The regulator
2.3.2 Liberalisation
2.4 Major telecom operator in Macau
2.4.1 Compahnia de Telecomunicações de Macau (CTM)
2.5 Telecommunications infrastructure
2.5.1 Domestic and international
2.6 Data market
2.6.1 Data network
2.6.2 Macaupac
2.6.3 ISDN
2.7 Internet market
2.7.1 Overview
2.8 Broadband market
2.8.1 Overview
2.9 Convergence
2.9.1 Overview of the broadcasting market
2.9.2 Cable TV
2.9.3 Satellite TV
2.10 Mobile communications
2.10.1 Overview of Macau’s mobile market
2.10.2 Mobile technologies
2.10.3 Major mobile operators
3. Glossary of Abbreviations
Table 1 - Country statistics Hong Kong - 2008
Table 2 - Telecom revenue and investment statistics - 2006
Table 3 - Telephone network statistics - 2007
Table 4 - Internet user statistics - 2007
Table 5 - Broadband statistics - 2007
Table 6 - Mobile statistics - 2007
Table 7 - National telecommunications authorities
Table 8 - Fixed telephone lines versus mobile subscriptions and penetration - 1998 - 2007
Table 9 - Number of telecoms licences by category - November 2007
Table 10 - PCCW revenue and profit - 2001 - 2007
Table 11 - City Telecom revenue and profit - 2001 - 2007
Table 12 - HTIL revenue and profit - 2002 - 2006
Table 13 - Wharf T&T revenue and profit - 2001 - 2006
Table 14 - Wharf T&T fixed line and IDD volume - 2001 - 2006
Table 15 - Fixed-line in service and teledensity - 1994 - 2007
Table 16 - AsiaSat revenue and profit - 2005 - 2006
Table 17 - AsiaSat satellite utilisation - 2005 - 2006
Table 18 - APT Sat revenue and profit - 2001 - 2006
Table 19 - APT Sat satellite utilisation - 2003 - 2006
Table 20 - Internet and broadband key statistics - 2007
Table 21 - Internet user and subscribers - 1996 - 2007
Table 22 - Internet subscribers by access type - 2007
Table 23 - Broadband subscribers - 2000 - 2007
Table 24 - Broadband subscribers by access type and annual change - September 2007
Table 25 - Broadband subscribers and households - 2007
Table 26 - Broadband Internet traffic volume - 2000 - 2007
Table 27 - Internet traffic volume (PSTN and /roadband) - 1997 - 2007
Table 28 - Use of International Private Leased Circuits (IPLCs) - 2002 - 2007
Table 29 - Registered domain names - February 2008
Table 30 - Cable modem subscribers - 2003 - 2007
Table 31 - DSL subscribers - 1999 - 2007
Table 32 - i-Cable broadband and VoIP subscribers, penetration and ARPU - 2000 - 2007
Table 33 - i-Cable cable TV subscribers, penetration and ARPU - 1995 - 2007
Table 34 - HKBN triple play subscribers, ARPU and IDD traffic volume - 2003 - 2007
Table 35 - PCCW broadband subscribers - 2000 - 2007
Table 36 - Pacific Internet subscribers by access type - 2004 - 2006
Table 37 - Online trading volumes - 2000 - 2005
Table 38 - Broadcasting service statistics - March 2007
Table 39 - TV household penetration by license type - March 2007
Table 40 - Coverage of Hong Kong households with different TV transmission modes
Table 41 - Pay TV subscribers - cable, satellite and ADSL - 2001 - 2007
Table 42 - i-Cable broadband, cable TV and VoIP subscribers and ARPU - 2000 - 2007
Table 43 - TV viewership in Hong Kong - 2005 - 2006
Table 44 - PCCW NOW TV subscribers and ARPU - 2000 - 2007
Table 45 - Triple play subscribers and ARPU - 2003 - 2007
Table 46 - Mobile subscribers and annual change - 1992 - 2007
Table 47 - Mobile service revenue - 1992 - 2007
Table 48 - Total mobile numbers ported - 1999 - 2007
Table 49 - PCS subscribers and annual change - 1997 - 2007
Table 50 - 3G mobile subscribers - 2005 - 2007
Table 51 - Mobile operators, technology, subscribers and annual change - September 2007
Table 52 - Operator market share by subscribers - 2003 - 2007
Table 53 - CSL New World subscribers and annual change - 1998 - 2006
Table 54 - New World Mobility subscribers and annual change - 1998 - 2005
Table 55 - Hutchison subscribers and annual change - 1998 - 2007
Table 56 - Hutchison 3G Hong Kong subscribers and annual change - 2004 - 2007
Table 57 - Hutchison Hong Kong and Macau revenue - 2002 - 2006
Table 58 - Peoples subscribers and annual change - 1998 - 2007
Table 59 - SmarTone subscribers and annual change - 1998 - 2007
Table 60 - SmarTone-Vodafone 3G subscribers - 2004 - 2007
Table 61 - SmarTone-Vodafone revenue and profit - 2002 - 2007
Table 62 - SmarTone-Vodafone ARPU and data contribution - 2002 - 2007
Table 63 - Sunday subscribers and annual change - 1998 - 2007
Table 64 - Sunday net profit/loss - 2000 - 2006
Table 65 - PCCW Mobile revenue, EBITDA and net profit - 2005 - 2007
Table 66 - PCCW 2G and 3G subscribers - 2005 - 2007
Table 67 - MVNO subscribers - 2005 - 2007
Table 68 - Prepaid and activated SIM cards - 1997 - 2007
Table 69 - Monthly SMS messages sent and received - 2002 - 2007
Table 70 - SMS statistics for special days - 2005 - 2008
Table 71 - 2.5G subscribers - 2002 - 2007
Table 72 - Country statistics Macau - 2008
Table 73 - Telephone network statistics - January 2008
Table 74 - Internet user statistics - January 2008
Table 75 - Broadband statistics - August 2007
Table 76 - Mobile statistics - January 2008
Table 77 - National telecommunications authorities
Table 78 - Fixed-lines and teledensity - 1991 - 2008
Table 79 - Internet users - 1996 - 2008
Table 80 - Internet subscribers - 1996 - 2008
Table 81 - Broadband subscribers and households - January 2008
Table 82 - Broadband subscribers - 2001 - 2008
Table 83 - DSL subscribers - 2001 - 2007
Table 84 - Broadcasting statistics - 2006
Table 85 - Total mobile subscribers versus prepaid - 1990 - 1996; 1998 - 2008
Table 86 - Mobile operators, technology, subscribers and annual change - September 2007
Exhibit 1 - Licensees and issue dates for FTNS licences - November 2007
Exhibit 2 - The ‘original’ PCCW deal
Exhibit 3 - Fixed Telecommunications Network Services (FTNS) licensees - November 2007
Exhibit 4 - Major submarine cables with landing points in Hong Kong - 2006
Exhibit 5 - External FTNS licensees -November 2007
Exhibit 6 - Satellite Based External FTNS licensees -August 2007
Exhibit 7 - Overview of TV broadcasting licences - February 2008
Exhibit 8 - TV services receivable by broadcasting company - October 2007
Exhibit 9 - Transmission modes employed by TV licensees
Exhibit 10 - Mobile Virtual Network Operator licensees - 2007

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