Newcomers see hope in roll-out of low-cost wireless broadband
New investors are expected to carve a significant niche in Hong Kong's competitive high-speed internet services market, thanks to the city's scheduled introduction of low-cost wireless broadband technology in 2009, experts say.
The government will push wireless broadband development next year, issuing up to six new licences and assigning 2.3 gigahertz and 2.5 GHz bandwidths for the service. Adopting a technology-neutral stance, it has set no limit on the usage of broadband in either mobile or fixed-line access.
Local fixed-line players probably will be eager to get a licence as it provides them last-mile access to end-users' homes. Wharf T&T, New World Telecom and i-Cable Communications have mentioned their interest in new licences.
WiMax will be a leading technology to be deployed in the new spectrum while equipment vendors Alcatel-Lucent and ZTE have led development of such.
The next generation of WiMax should help latecomers or new investors in the telecommunications market break the monopoly of existing players, said Karim El Naggar, vice-president of WiMax at Alcatel-Lucent.
He said the company's solution was ready for fixed-line wireless and mobile access. Operators can provide both services. Alcatel-Lucent has signed 17 contracts to offer WiMax solutions, with one in commercial operation in the Dominican Republic.
'New players are able to destroy the existing market' as the new network would be deployed on an all-internet protocol network to cut costs, Mr El Naggar said.
Fixed-line operators could use the next WiMax as a last mile to end-users while mobile operators could use the technology to complement the existing 3G network in providing mobile broadband service 'at a relatively cheaper price', he said.
'The new technologies should complement each other but it may compete to provide services,' Mr El Naggar said. 'As mobile service is prevalent and the trend is irreversible, fixed-line operators need to deploy a WiMax solution to offer quadruple play by providing service outside the home.
'For mobile players, WiMax can let them enter the fixed-line market by providing a fixed-to-mobile convergence solution. WiMax can also bundle with 3G service for mobile broadband service.'
Mainland vendor ZTE said its next version or wave two of WiMax solutions will be able to support full mobility service and ensure quality of voice service.
'The next version of WiMax will support the hangover mechanism to enable the new network to switch between existing mobile networks,' said Sean Cai, deputy general manager of ZTE's WiMax product line.
As a data-centric network needing fewer base stations than existing voice mobile networks, WiMax is more flexible. Moreover, it 'can put the transmission priority on voice service to ensure communication', Mr Cai said.
ZTE's mobile WiMax products are being tested for interoperability and will be completed next year. US telecommunications operator Sprint will introduce ZTE's network once the test is finished.
Sprint announced earlier it would invest up to US$5 billion on a WiMax network in the United States.
'The success of Sprint in [the technology] will be a benchmark for global WiMax development,' Mr Cai said. 'Sprint will offer the service as a new brand.'
Although Sprint already offers 3G service on CDMA technology, WiMax can offer 10 times more data transmission capacity, he said.