Update: HK Grants Broadband Licenses

Hong Kong yesterday opened up its broadband Internet service market, issuing six licenses for carriers to offer high-speed data services in competition with incumbent Cable & Wireless HKT, the government announced in a statement.

In addition to a license granted to i-Cable Communications Ltd. for Internet service over its existing cable network, the government licensed five companies to provide services over fixed wireless networks.

Also yesterday, the government licensed 12 carriers to offer external long-distance services over satellite, paving the way for much more aggressive competition in international telephony.

Together, the moves are expected to vastly expand the Internet services options available in Hong Kong, where fledgling Internet companies are attempting to gain a foothold in the exploding Asian Internet industry.

The providers have been offered the licenses and are expected to accept the terms of the licenses soon, according to the government's Office of the Telecommunications Authority (OFTA). The full terms of the licenses will be made public after signing, OFTA officials said.

Officials of the Office of the Telecommunications Authority (OFTA) said the response to its May 1999 call for fixed wireless applications exceeded the agency's expectations. Moreover, because of applicants' hefty demands on scarce bandwidth allocated to fixed-wireless broadband, OFTA had to narrow its choice to five. The finalists were chosen on the quality of their applications.

Fixed-wireless licenses were issued to PSINet Hong Kong Ltd., HKNet-Teligent Co. Ltd., Hong Kong Broadband Network Ltd., Eastar Technology Ltd., and SmarTone Mobile Communications Ltd.

The license for i-Cable, the territory's incumbent pay-TV provider, was issued following a special application by the company, according to OFTA. The company plans to offer Internet access at speeds as high as 10M bits per second (bps), as well as video and possibly voice service, according to a company official.

It will begin services in the first quarter of this year, the official said.

A statement yesterday by City Telecom Inc., parent company of Hong Kong Broadband Network, said the company would introduce its services next month.

Offerings will include basic Internet access, basic voice telephony, video conferencing, television and other multimedia services. It will offer its services at 30 percent less than the cost of HKT's services, the statement said.

HKNet-Teligent, a joint venture between Internet service provider HKNet, Hong Kong and Mainland carrier CCT Telecom, and U.S. wireless technology company Teligent, will offer a range of services at speeds as high as 5M bps. Offerings will include video, meetings, Web access and e-mail, according to a company statement.

One observer said a competitive broadband market could help make Hong Kong a hotbed of Internet development.

"Hong Kong, of all the places in Asia, knows how to respond to competition, and the Internet industry benefits by it," said Dennis Philbin, managing director at research firm International Data Corp. Asia-Pacific, in Singapore.

"Superior infrastructure benefits Internet startups, and with broadband becoming less expensive, it's certainly going to be a stimulant," Philbin said.

The competition is likely to give Hong Kong an edge over Singapore, for example, where high-speed services are well developed but little competition exists, leading to higher bandwidth prices, Philbin said.

External satellite telecom licenses were offered to Hutchison Telecommunications Technology Investment Ltd., NTT Com Asia Ltd., Pacific Century Matrix (HK) Ltd., PSINet Hong Kong Ltd., Teleglobe Hong Kong Ltd., China Digital SatNet Ltd., Asia Satellite Telecommunications Co. Ltd., CTI International Ltd., Million Point Technology Ltd., Far East Gateway Ltd., Galaxy Satellite Broadcasting Ltd. and SmarTone Mobile Communications Ltd.

According to OFTA, the external services together will expand Hong Kong's external communications capacity by 3G bps.

SmarTone can be reached at +852-2880-2688 or on the Web at http://www.smartone.com.hk. HKNet-Teligent, in Hong Kong, can be reached on the Web at http://www.hknet.com. City Telecom Inc. can be reached on the Web at http://www.ctihk.com. PSINet Hong Kong can be reached at +852-2170-7401 or on the Web at http://www.psinet.com.hk i-Cable Communications Ltd can be reached on the Web at http://www.i-cable.com OFTA can be reached at http://www.ofta.gov.hk.

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More about Cable & WirelessCity TelecomEastar TechnologyGatewayHKNetHKTHutchisonHutchison Telecommunications (Aust)i-CABLE CommunicationsNTT AustraliaOffice of the Telecommunications AuthorityPSINetSmarTone Mobile CommunicationsTeleglobeTeligentWireless HKT

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