Hutchison Global Communications gears up for new wave of investments

Capital spending expected to be between HK$600 million and HK$700 million this year

PUBLISHED : Monday, 16 November, 2015, 5:09am
UPDATED : Monday, 16 November, 2015, 5:06am

Hutchison Global Communications (HGC), part of tycoon Li Ka-shing’s telecommunications empire, is gearing up for a new wave of investments and services after spending more than HK$10 billion over the past 20 years building an extensive fibre-optic network across Hong Kong.

“Our major thrusts in the next few years include expanding aggressively in the home market, addressing the small and medium-sized enterprise market, and our data centres, which are very important drivers for various cloud-based services,” Peter Wong King-fai, the chief executive and group managing director at Hutchison Telecommunications Hong Kong, said.

HGC, the fixed-line network business of Hutchison Telecom, marked its 20th anniversary last month, which provided an opportunity for its senior management to discuss future initiatives.

“We are also watching very carefully the developments in 5G mobile technology,” Wong said.

He said 5G operations in some markets were targeted in 2020, after the official standards for the technology are drawn up and widely adopted by the global telecommunications industry.

We are also watching very carefully the developments in 5G mobile technology
Peter Wong, Hutchison Telecom

Japanese telecommunications carrier NTT Docomo, for example, is scheduled to start its 5G network trials a few years ahead of the 2020 Summer Olympics in Tokyo.

Capital spending at HGC, which recorded first-half revenue of HK$1.98 billion, is between HK$600 million and HK$700 million this year, according to Hutchison Telecom chief operating officer Jennifer Tan Yuen-chun.

“We expect to be very busy next year,” Tan said.

According to sources, HGC could play an important role as the domestic telecommunications infrastructure provider for Apple Pay, the mobile payment and digital wallet service of US technology giant Apple, when it is launched in Hong Kong next year.

“Apple Pay will be available to eligible American Express customers in Australia and Canada this year, and is expected to expand to Spain, Singapore, and Hong Kong in 2016,” Apple chief executive Tim Cook said last month.

American Express said last month that Apple Pay will allow American Express Card members to pay on the go with an iPhone, Apple Watch or iPad when the service enters those markets.

Hutchison Telecom, through its mobile services arm 3 Hong Kong, was the first network operator in Hong Kong to support the introduction of Apple’s iPhone 3G in 2009.

Wong declined to comment on the speculation about Apple Pay, but said HGC has “kept its strategy of being only a network provider – a platform that is open to other content providers”.

PCCW Group’s HKT, which operates the largest mobile and fixed-line networks in Hong Kong, introduced its own mobile-payment service called “Tap & Go” in July.

HGC last year also collaborated with Chinese online video service provider LeTV to package ultra high-definition, or 4K, home broadband and entertainment content in Hong Kong.

“Our extensive fibre-optic network and advanced data centres position us well to help OTT (over-the-top) players grow their services,” Tan said.

Rising demand from cloud services is driving efforts by HGC to expand its data centre facilities in Hong Kong.

Cloud computing allows companies to buy, lease, sell or distribute over the internet as well as private networks a vast range of software, business systems and other digital resources as an on-demand service, like electricity from a power grid. Such resources are hosted in data centres.

Wong said HKT and Hong Kong Broadband might be ahead in the home market, but HGC’s long experience in serving local and multinational business customers made its fibre-optic network highly competitive in terms of speed and reliability.

“Our network consists of more than 1.4 million kilometres of fibre optic cable, enough to circle the earth over 36 times,” Wong said.

This network currently covers about 1.7 million local households, which HGC plans to expand to two million households by the end of 2017.

Wong added that HGC’s fixed-line network covers more than 90 per cent of commercial buildings in Hong Kong. It also provides the essential “infrastructure backbone” for a number of mobile network operators, including 3 Hong Kong and a couple of competitors, to connect to the public internet.

HGC also runs the biggest Wi-fi network in Hong Kong, with more than 16,000 hotspots spread across the city.