Slow to act: Hong Kong government is the real laggard when it comes to improving broadband speeds for all

Robert Clark says given Hong Kong's resources and compact size, the government must pledge, as others have done, to ensure fast broadband access for all - starting with an overhaul of the dismal service in rural areas

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When Australia's satellite under its new broadband network project starts service in mid-2016, people in the Simpson Desert will enjoy as much as 12 times the connection speed of those on Lamma Island. Photo: Christopher DeWolf

Published: 9:30am, 24 Oct 2015Updated: 9:08am, 26 Oct 2015

Hong Kong rightly enjoys a reputation as one of the most wired cities in the world, ranking at or near the top in many digital categories. Internet users enjoy peak download speeds of 94.8 megabits per second (Mbps), behind only Singapore (108.3 Mbps), according to the Akamai global survey, while the city's addiction to smartphones is fed by the availability of four mobile broadband networks. Just under a third of the city's 16.9 million mobile service subscribers are 4G users.

These numbers are testament to the healthy competitive environment created by the government and the regulator Ofca, as well as our affinity for gadgets and the always-on lifestyle.

But after 20 years, the industry rules are showing signs of wear. There are gaps in the network infrastructure, in the competitive environment and in consumer outcomes that can no longer be ignored.

Dealing with market failure is one reason why we have an industry regulator

This is most evident in the roll-out of next-generation broadband networks. It is an issue that many governments are grappling with. The scale and cost have led to some governments investing heavily in these networks. It is to Hong Kong's credit that we have gone most of the journey under the power of competition.

Today, the city's leading telecommunications operator, PCCW, reports that 87 per cent of buildings are fibre-ready, capable of supporting 100 Mbps, while 82 per cent of homes are fibre-ready.

But that leaves a gap of 13 per cent of buildings without fibre. At the same time, some 13 per cent of households have a choice of just one broadband provider, according to Ofca figures.

All of Hong Kong's outlying islands are serviced by PCCW. Photo: Dickson Lee

That is to say, in an industry driven by competition, nearly one in every eight Hong Kong households is subject to a de facto monopoly. Of course, the vast majority of these households are in rural areas, where the population is less and the network construction costs are much higher. But as there is no competition, the incumbent provider has little incentive to invest further. This is where our transition to next-generation broadband stalls.