Hong Kong Broadband Network (HKBN) has increased its broadband internet fees by 50 per cent after a public rebuke from Hong Kong's telecommunications regulator this week about misleading advertising of the service.
On Thursday, the Office of the Telecommunications Authority (Ofta) issued HKBN a warning against use of misleading and deceptive promotional materials to sell the broadband service, which the authority said offered less bandwidth per user than company marketing materials claimed.
Ofta was acting on a complaint by a subscriber to HKBN's 10 Mbps (megabits per second) broadband service who said that the actual speed of the service was about 210 Kbps (kilobits per second) - or 2 per cent of that advertised.
The company's print ads promised a dedicated 10 Mbps service for each subscriber.
'HKBN lets its users enjoy 10 Mbps broadband service. It will not be affected by others,' claimed one ad.
Telecommunications operators found to be engaged in deceptive and misleading conduct in their advertising and marketing materials concerning the promotion of their services would be in breach of section 7M of Hong Kong's Telecommunications Ordinance.
The maximum penalty for such a violation is a fine of $200,000.
Although HKBN stated in the small print in its advertising materials that dedicated 10 Mbps speed referred to the connection between the customer's premises and the nearest IP switch, Ofta said the footnote was too technical for most customers and did not fairly inform them of the service quality.
In practice, the maximum 10 Mbps could be achieved only if there were only one active user in the network.
'It is highly unlikely that HKBN intends to serve only one customer per switch ... even if there is only one user ... 10 Mbps is not always possible,' Ofta said.
'Having considered HKBN's representation ... the 10 Mbps claims made by HKBN in the subject promotional materials were misleading in breach of section 7M of the (Telecommunications) Ordinance,' it said.
HKBN recently increased its 10M broadband internet tariff by 54 per cent to $148 from $96, a price level that had been unchanged for more than a year.
'We are applying the new charge on new customers currently covered by our self-built fibre [network], which covers about 800,000 households. After the increase, our charge will still be lower than competitors such as Hutchison Global Communications and PCCW,' said an HKBN spokeswoman.
The spokeswoman said HKBN was raising broadband charges because its network could now guarantee a speed of at least eight Mbps to its customers.
PCCW's broadband service costs $224 and includes NOW Broadband TV.
At present, Hutchison Global is offering a two-month tariff rebate on a 14-month contract so on average, customers are charged $137 per month for a dedicated broadband speed of 10 Mbps. However, the offer is limited to selected districts.