HKBN plans shake-up of telecoms market with launch of bundled fixed-line broadband and mobile package

Hong Kong Broadband Network (HKBN) is targeting 150,000 subscribers in its first 12 months of operation as the city’s newest licensed mobile virtual network operator (MVNO).

William Yeung Chu-kwong , its the chief executive, said on Thursday that initial customer take-up would give the firm a nearly two per cent share of Hong Kong’s HK$23-billion-a-year mobile services market .

“We believe this will be very positive in helping revenue and earnings growth,” said Yeung, who announced the trial launch of its mobile service this month.

Consumers who subscribe to or renew their HKBN fixed-line broadband service contracts will enjoy a six-month waiver of their HK$108 monthly mobile service fee.

The Office of the Communications Authority granted the licence to HKBN last month. It also allows the company to sell smartphones and other mobile devices.

MVNO license-holders provide communications services by leasing mobile network capacity from an existing telecommunications operator, typically, at wholesale prices and reselling it to consumers at reduced prices under its own brand.

HKBN, Hong Kong’s second-largest fixed-line residential broadband operator that counts more than 800,000 subscribers, is the city’s 26th MVNO.

Other MVNOs in Hong Kong include China Unicom, Sun Mobile, NTT Com Asia, Truphone and 21Vianet.

Yeung said HKBN will formally launch its mobile service in the middle of September, which is widely expected to be around the same time Apple will launch its latest iPhone.

“We’re already talking to handset suppliers, including Apple. So we’ll see if we can reach an agreement with Apple,” Yeung said.

Nomura research analyst Gopa Kumar said in a report that there are not many cases across the Asia-Pacific region “of MVNOs successfully disrupting the mobile market, as they are limited by roaming or network access fees charged by [the incumbent] mobile network operators”.

“However, as HKBN has a strong presence in broadband, the economics could be better,” the analyst said.

HKBN has signed memoranda of understanding with both SmarTone Telecommunications and China Mobile Hong Kong to be its mobile capacity supplier as an MVNO. Both SmarTone and China Mobile Hong Kong also resell HKBN’s fixed-line broadband capacity to subscribers.

“More than a decade ago, HKBN entered the residential broadband market and set a new industry standard with our fibre network and competitive pricing,” Yeung said.

“Now we are expanding into the mobile market with a vision to once again change the game, bringing top-value options to consumers.”

SmarTone, which runs 4G mobile network operations in Hong Kong and Macau, will provide the network capacity for HKBN’s promotional mobile plan this month.

Yeung said HKBN does not expect to spark a new price war since its mobile business is starting from a small base, and its focus was on bundled fixed-line broadband and mobile subscriptions.

Nomura has forecast HKBN to record a 17 per cent year on year increase in revenue to HK$2.74 billion in its fiscal year ended August 31. HKBN’s share price slipped 0.22 per cent to finish trading at HK$9.21 on Thursday.