Consumer choices for residential broadband services are dwindling as resellers exit the market, citing tough competition with wholesaler PCCW.
Resellers HKNet and So-net have quit the residential market, transferring their accounts to PCCW. This has left just a handful of resellers to compete with the big guys: PCCW, Hutchison Global Communications, Hong Kong Broadband Network and i-Cable.
'The wholesale price charged by PCCW represents up to 70 per cent of the total cost for an internet reseller,' said Lento Yip Yuk-fai, director of Netfront Internet Services, a reseller targeting the corporate market. 'This does not take into account other overheads such as rental for data centres, servers, one-off installation fees, upstream bandwidth charges and so on.'
PCCW refused to comment. The company charges internet resellers $110 monthly per residential broadband line. Its Netvigator service is as low as $198 per month.
'With pricing like that, where is the margin for profit?' Mr Yip said.
Hong Kong has 190 internet service providers, but just a handful provide access services to homes.