HKT to transform telecom services into more consumer- friendly ‘cloud’ business

HKT, the largest telecommunications services provider in Hong Kong, unveiled on Monday its ambitious “Project Earth”, a digital transformation initiative that steps up the company’s preparations for future businesses based on fields like 5G, artificial intelligence and the internet of things.

“This transformation journey touches all parts of the business,” said Alex Arena, the group managing director at HKT, in his keynote address at Huawei Technologies’ Operations Transformation Forum in Hong Kong.

Project Earth, which HKT started to plan and design last year, is geared towards streamlining its operations, “changing from a network-centric to a more customer-centric” service provider, Arena said.

Shenzhen-based Huawei, the world’s biggest telecommunications network equipment supplier by revenue, is HKT’s main technology partner for its digital business transformation.

The initiative will have its pilot launch this fourth quarter focused on the corporate market as more work is expected to follow in the next two years, which would help accelerate the operator’s preparations for 5G mobile development at the end of this decade.

It also marks a major effort for HKT, the telecommunications arm of tycoon Richard Li Tzar-kai’s PCCW group, to further enhance its capabilities in Hong Kong, where it is now the sole integrated fixed-line and mobile network services provider.

Hutchison Telecommunications Hong Kong, which operates the city’s second-largest wireless network, sold its fixed-line service business to Asia Cube Global Communications in July for HK$14.5 billion in cash.

Worldwide spending on digital transformation technologies, such as cloud computing, is forecast to reach US$1.2 trillion this year, up 17.8 per cent over last year, according to recent estimates by research firm IDC.

“We need to disrupt ourselves,” Arena said. “Otherwise, one day we will be like Kodak.”

Founded in 1888 in New York, the Eastman Kodak Company’s business was built on selling photographic film products and has since become the poster child of a disrupted company.

It filed for bankruptcy in 2012 after a prolonged financial struggle amid the rise of digital cameras, which eventually became largely absorbed by mobile phones. It emerged from bankruptcy a year later after selling many of its patents and exiting various businesses.

Peter Lam, the managing director for engineering at HKT, said consumers in the digital era expect all services to be responsive, user-defined, self-service and online.

“We are building a new cloud-based platform as a solid foundation for future-oriented operations and networks,” Lam said. “This will enable us to unlock the enormous potential of digital services for customers and for future business growth.”

Cloud services enable companies to buy, lease or sell software and other online digital resources on demand, just like electricity from a power grid.

Lam, without disclosing investment figures, said HKT plans to establish a fully cloud services-enabled network in the next two years.

Hou Yuzhou, Huawei’s project director for HKT’s business transformation project, said other cutting-edge technologies destined for the operator include network virtualisation, software-defined networking, internet of things and big data.

One of the initial corporate services that HKT will provide in the fourth quarter under Project Earth will allow enterprises to manage online the mobile data usage of its staff, such as service subscription, quota management, and splitting bills based on personal and business usage.

Arena said HKT was already “building a 5G-ready” infrastructure”, with new, easy-to-upgrade base stations and 1-gigabit per second 4G service at “selected high-traffic locations”.

Known as the latest advance in mobile communications, 5G is expected to support 1 million connected devices per square kilometre; 1 millisecond latency, or the amount of time a packet of data travels from one point to another; higher energy and spectral efficiency; and up to 20Gbps of peak data download rate.