Hong Kong's dense population comprises 6.9 million residents with 9.3 million mobile subscriptions - a mobile penetration rate of 135%. Add to that 3.8 million fixed telephone lines and you have a teledensity of 54% (among the highest in the world) and one of the more competitive telecoms markets on the planet. Hong Kong telcos are under huge pressure to retain customers through new custom offerings and better customer service.
Hong Kong's incumbent carrier PCCW is pinning its strategy on a quadruple-play converged platform offering fixed and mobile voice, broadband internet and IPTV. According to a recent Pyramid Research report, 'convergence of networks and offerings will gain momentum with more fixed-mobile converged services and other triple-play providers emerging in the market.'
The report states: 'This change in the downstream market allows vendors to look for opportunities in a matured market, where the focus will now turn to efficiency gains in network operations.'
The drive for more efficient operations is clear at PCCW, which strives to consolidate product offerings and operational processes to create a more streamlined organization and deliver better service levels.
'Telecoms companies can no longer look at their services and systems by product line and brand themselves as a fixed or mobile operator, or an ISP,' said George Fok, managing director at PCCW Solutions, the arm of PCCW that handles all its internal IT requirements as well as external IT business. 'Operators must now look at how to deliver content across all platforms, fixed, mobile or internet.'
Samuel Poon, director of IT at New World Telecom, agreed that telecoms operators must now offer a combination of traditional telecoms services, IT and also media offerings to consumers and businesses.
'Services are becoming network-independent - they should be provided across different networks at the same time, including fixed and wireless networks,' said Poon. He added that telecoms services are also merging with services more commonly associated with IT service providers. Consolidation effect
Poon believes the challenge for the IT organizations within telcos is to build flexible systems and architecture to support these new services. New World is actively pursuing virtualization to help consolidate infrastructure. 'In the last 18 months we've cut down maybe 30% of our servers across Windows and Unix platforms,' he said.
'Virtualization and the introduction of SOA have allowed the IT team to roll out services quicker, at lower cost and less effort than under the traditional IT framework,' said Poon. 'By following SOA principles we have cut down the rollout of a typical new service from two weeks to one week.'
One example is the development of SMS for both mobile and fixed platforms. Previously, enabling SMS on fixed lines would have required a new purpose-built system. But now, using the SOA framework which allows modular processes to be reused, the IT team can build an SMS service to run any network and platform that is required in future. 'Fixed-mobile applications like a single number for mobile and fixed have also been enabled by SOA,' said Poon. The emergence of converged services presents telecoms operators with significant business and IT challenges.