The Mobile Data Surge in Hong Kong: Technical and Regulatory Approaches
Shazna Zuhyle
March 2014
Executive Summary
Hong Kong has one of the most sophisticated telecommunication sectors in the world. It offers some of the highest broadband speeds regionally and globally and has the highest number of SIMs per hundred. Since the launch of the iPhone in Hong Kong the use of mobile data has risen exponentially. Given its advanced networks, technologies and unique regulatory regime, it provides examples of good practices for other economies yet to face the mobile data upsurge.
Its size and population are by no means an indication of the number of services providers. With five mobile operators serving a population of approximately seven million in a highly deregulated sector, the level of competition is intense. The island state has created a conducive environment for investment (including foreign investments) in the Information and Communication Technology (ICT) sphere. The national regulatory agency, OFCA, maintains minimal involvement in terms of exercising control. The limited land mass and population density does pose technical challenges to network operators, but makes it easy and inexpensive to roll-out networks and services within a short time frame.
Given the sophistication of the sector and its experience of having successfully dealt with a mobile data surge, this paper aims to provide recommendations to service providers and policy makers of developing economies. The key recommendations are presented by network segments or domains. The biggest challenges faced in the access network are the lack of spectrum and the efficient use of network resources. In order for mobile broadband to be utilizable, access to 3G networks at minimum is mandatory. Therefore, adequate 3G and 4G frequencies have to be released. However, recognizing the technical limitations, other means, such as small cell technologies (e.g. Wi-Fi) ought to be explored. Off loading the bulk of the data traffic will bring about efficiencies on the mobile network.
Although irrelevant to the case of Hong Kong, good practices such as open access to existing capacity in the domestic backhaul network is imperative to support the demands of the mobile networks. The use of Internet Exchange Points (IXPs) can reduce costs by eliminating the unnecessary use of third party networks to carry mobile data. By using local or regional peering points data can be exchanged much more efficiently. Finally, one of the major chokepoints – the price of international capacity. Although data of this nature is not widely published, based on publicly available data and feedback from Hong Kong based mobile operators, the prices of international backhaul are considered inexpensive and obtaining additional capacity is hassle free. This was a key factor that enabled operators in Hong Kong to deal with the rapid increase of mobile data use and is something that ought to be managed by other economies.
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