Firms can profit with contingent internet services
SMEs will need extra bandwidth after last week's disruptions
Local telecommunications operators and internet service providers, which faced disruption last week due to the earthquake off Taiwan, have an opportunity to boost revenue by selling contingent services to small and medium-sized enterprise (SME) customers, according to an internet specialist.
'SMEs were the biggest victims during the internet disruption, because, unlike large firms, they don't have the resources to buy spare bandwidth capacity for contingent use,' said Internet Society chairman Charles Mok Nai-kwong said.
At least five repair ships have been commissioned to patch up six undersea cables damaged during the December 26 earthquake. The event led to a much-reduced or total loss of internet services in Hong Kong and in parts of Asia.
'This incident showed that internet disruption could happen any time,' Mr Mok said. 'Telecommunications operators can provide SMEs with spare bandwidth capacity for a higher fee to avoid disruption when similar disasters strike.'
He shared the view that it was fortunate the internet disruption happened in the holiday period. The consequences could have been unimaginable if it had been a normal time of year, he said.
On December 27, I-Cyberhk Technology, a Hong Kong e-mail hosting service provider, signed a contract with PCCW Global to provide an emergent broadband service to SME customers.
The company re-routed its broadband network to use the east Asia Crossing undersea cable, which transfers data through Japan to the United States instead of through Taiwan, to avoid data traffic congestion.
'Our broadband services for contingent use with a transfer speed of 128 kilobytes are enough for e-mail and MSN use, and cost US$215 per month,' said Allen Hui, the business development manager at I-Cyberhk. 'The cost to launch this service is very large but the pricing is acceptable for many international SMEs.'
Users may also buy a bandwidth of 256 kilobytes for a higher fee.
Mr Hui said many firms with businesses in Hong Kong and the US used I-Cyberhk's latest broadband service. 'Without it, they would need to send people overseas at a much higher cost,' he said.
Before the earthquake, I-Cyberhk's main business was providing e-mail hosting services with a monthly fee of US$34 for every five e-mail accounts.
Network carriers such as Reach and Flag Telecom may also benefit from the earthquake because of maintenance contracts.
'In the past, drastic competition caused large network carriers such as Global Crossing and WorldCom to go bankrupt. Now only a few network carriers survive and they can get those maintenance contracts,' Mr Mok said.
Although Reach will secure more contracts, its parent company, PCCW, may not benefit much from the internet disruption.
The cables of Reach, in which Telstra of Australia and PCCW each own 50 per cent, were the most seriously damaged by the earthquake, leaving PCCW's services the worst affected last week among all local telecommunications operators, an industry expert said. 'IDD and internet users are disappointed with PCCW due to its concentrated network in Taiwan and poor contingency planning, and they may switch to other operators,' he said.
By the third day after the disruption, PCCW's IDD calls had resumed but still faced congestion in Taiwan as did the company's internet traffic to Japan, South Korea and Taiwan.
Hong Kong Broadband Network, whose network was less concentrated in Taiwan, had 70 per cent of its internet bandwidth available and its IDD calls to Taiwan resumed on the third day.
RACE TO RECONNECT
Ships repairing fibre-optic cables trace the break then recover one cable and using a grapnel.
A buoy is attached to the end of the recovered cable. Recovery of the other cable proceeds. The faulty cable section is then removed
A replacement cable is jointed in and spliced to both ends. After a series of tests, the cable is released back to the ocean floor
Sources: Telegeography, Alcatel Lucent