HKT coverage forces firms into tough access deals
It goes almost without saying that Hong Kong has a great telecommunications network. Cable & Wireless HKT, once the monopoly player in the local and international call market, spared no expense in bringing broadband access to most of the city's homes and offices.
The trouble has been that companies wanting to challenge C&W HKT - in markets such as the still-deregulating voice services arena, and even for Internet and data services - have had to negotiate with the former monopoly in order to gain access to the city's millions of customers.
Even though C&W HKT has technically faced competition in the local fixed network for several years now, the networks by Hutchison Telecom, Wharf Holding's New T&T and New World Telecom are far from matching HKT's in geographical coverage.
That means companies are forced to negotiate with C&W HKT to gain access to the so-called 'last mile', which can prove costly in terms of fees and in terms to delays in introducing services.
No wonder, then, that 14 companies applied for wireless FTNS (fixed telecommunications network services) licences, which by early next year would allow them to connect into homes and offices via a receiver placed on rooftops. These receivers then transmit to and from base stations connected to broader telecoms networks.
Given the frequencies of 24.5 gigahertz and higher that have been allocated for the wireless FTNS licences, most of the applicants will choose to use LMDS (local multi-point distribution system) networks. The cost of wiring 10 to 20 buildings would be about US$100,000, said Allan Wong, systems engineering manager for equipment maker Cisco Systems. Digging up streets to put in land lines could cost five to ten times more, he said.
Mr. Wong said that Cisco's tests of LMDS in Hong Kong have gone smoothly and have allowed simultaneous transmission of voice and data. But others say that other wireless technologies may work better in Hong Kong.
Craig Ehrlich, managing director at mobile phone company Sunday, said microwave technologies such as LMDS have 'inherent difficulties' in Asia because of factors such as heavy rainstorms, which can interfere with signals. 'I'm not convinced that in the end this will be an apples-to-apples competitor to wireline broadband,' he said.
Even Mr. Wong concedes that MMDS (multi-channel multipoint distribution system) networks are more appropriate, as it allows transmission through obstructions such as buildings and bad weather conditions such as heavy rain. The technology is even more cost-effective because it transmits over a broader range, he said.
The trouble is that MMDS operates in the 2.5- to 2.9-gigahertz range of the broadcasting spectrum, which in Hong Kong is already congested. Carriers and equipment vendors have asked the Office of the Telecommunications Authority (Ofta) to release some of the lower-end spectrum, but Mr. Wong said: 'It seems that Ofta is quite conservative and reluctant to release the spectrum.' Other possible solutions could come in the form of CDMA technologies, said David Farhing, marketing and communications manager for Airspan, a UK-based company that has installed wireless CDMA systems in the mainland, India and the Philippines. His company's latest equipment allows downstream speeds of up to 512 kbps and upstream speeds of up to 128 kpbs.
'LMDS is quite unproven, more expensive and has a lower distance range,' he said.
Whatever the problems LMDS presents in Hong Kong, telecoms companies are eager for a quick, wireless solution to their last-mile problems, M. Wong said.
