HKBN to drive revenue growth, gain market share with bundled telecommunications services
Chief executive says recent initiatives have transformed firm into a competitive “quad-play” operator with broadband, traditional telephone, mobile and over-the-top streaming video services
Hong Kong Broadband Network (HKBN), the city’s second-largest fixed-line residential broadband provider, plans to sharpen its focus this year on delivering more integrated services amid efforts to expand its business customers.
William Yeung Chu-kwong, the chief executive at HKBN, said the company’s recent initiatives have transformed it into a competitive “quad-play” operator with broadband, traditional telephone, mobile and over-the-top (OTT) streaming video services.
“An industry player can’t survive long term with just a fixed-line- or mobile-only strategy; it has to be integrated services,” Yeung told the South China Morning Post.
“For this financial year, we will focus on revenue growth ... and mobile will help us a lot to be more competitive in the corporate market.”
HKBN’s strategy gives it more firepower to compete against tycoon Richard Li Tzar-kai’s PCCW-owned HKT and NowTV operations, as well as i-Cable Communications and Wharf T&T, which was acquired last November by private equity firms MBK Partners and TPG Capital from property giant The Wharf (Holdings).
In 2015, HKBN pursued partnerships with OTT video content providers. It now has deals in place with Hong Kong broadcaster TVB’s myTV and Chinese internet company LeEco.
OTT video streaming applications deliver content over the internet, bypassing traditional distribution from telecommunications, cable or satellite network operators.
HKBN moved to double the size of its enterprise service business in February last year by acquiring the fixed-line broadband network and corporate marketing operations of New World Telephone Holdings for HK$650 million in February last year.
And in July, HKBN accelerated its transformation into an integrated services provider after the Hong Kong government granted it a mobile virtual network operator licence, which also allows it to sell smartphones and other mobile devices.
A mobile virtual network operator is a communications service provider that leases wireless network capacity from an existing telecommunications operator at wholesale prices, and resells that at reduced prices under its own brand.
SmarTone Telecommunications and China Mobile Hong Kong are HKBN’s mobile network partners.
HKBN started marketing on Thursday its new residential bundle offer, priced at HK$288 a month, which provides 100-megabit per second broadband connection, home telephone, OTT video streaming and 3G mobile service with 5-gigabyte monthly data plan.
Yeung said HKBN was keen to raise prices on broadband-only plans to increase adoption of its quad-play services among its 880,000 residential broadband subscribers.
The firm has also signed up about 70,000 mobile subscribers, which is a third of its 200,000 user target for its first year of mobile operations.
Nomura analyst Gopa Kumar, who has a “Buy” rating on HKBN, said in a report last month that the operator's strategy to focus on price increases, while cutting broadband discounts, should help offset the impact from its earlier aggressive price promotions.