Key Facts
Hong Kong's telecommunications industry is fully privatised.
There are no restrictions on foreign ownership.
The Hong Kong government began to open up the telecommunications market in 1995 when it terminated the local telephone monopoly held by the then Hong Kong Telecom and issued fixed telecommunications network services licences to four companies.
In 1998, the Government and the then Cable & Wireless Hong Kong Telecom reached agreement for the early termination of the external telecommunications service exclusive licence. In early 2000, the external telecommunications services market has been opened up. As at end June 2002, the Office of Telecommunications Authority (OFTA) has issued 16 cable-based and 8 satellite-based External Fixed Telecommunications Network Services (EFTNS).
The new operators will contribute to Hong Kong's development as a leading regional telecommunications centre and an Internet and broadcasting hub in Asia.
Five companies were licensed as of January 2000 to provide local fixed telecommunications services using wireless technology. In addition, a cable television company was permitted to offer cable modem services over its hybrid fibre coaxial cable network.As at end June 2002, there are 213 external telecommunications service operators in Hong Kong. The results of liberalisation in Hong Kong's mobile phone market are lower costs to
customers and greater access. The mobile phone services market is very competitive with six operators. There are 85 (include Prepaid SIM Card) subscribers per 100 inhabitants, one of the highest in the world.
In October 2001, OFTA has issued licences for third-generation (3G) mobile services to four companies, namely, Hutchison 3G HK Ltd, SmarTone 3G Ltd, Hong Kong CSL Ltd and Sunday 3G (HK) Ltd. Public Non-exclusive Telecommunications Service (PNETS) licences for operating Mobile Virtual Network Operator (MVNO) service is now open for application. As at end June 2002, there are 6 MVNO operators.
Internet Usage
In April 2002, the number of Internet users has reached 2.65 million , representing a penetration of 39% and there were 256 Internet Service Providers in Hong Kong.
Over 98% of households and more than 95% of business buildings are covered by broadband connections.
Hong Kong is the first city to introduce broadband-based interactive television, a key feature of which is video-on-demand.
Customers of Licensed Internet Service Providers (Narrowband and Broadband) as of end April 2002
| End of Month |
Estimated no. of registered customer accounts with dial-up access(narrowband Internet access up to 1 Mbps) (excliding Internet pre-paid calling cards) |
Estimated no. of Internet pre-paid calling cards for dial-up access |
Estimated no. of registered customer accounts with leased line access |
Estimated no. of registered broadband Internet access customer accounts |
| 04/2002 |
1,848,172 |
12,041 |
5,345 |
790,088 |
Favourable Factors
One of Hong Kong's major advantage is that it is compact and its plethora of high-rise buildings is easy to "wire up". On the other hand, there are geographical barriers including the hilly terrain. However, the phone network covers 100% of Hong Kong and over 400 000 km of fibre-optic cable has been laid.
Active measures by the Hong Kong SAR Government to encourage growth in this sector includes:
The HKSARG's telecommunications policy is to facilitate and encourage development of the telecommunications market in Hong Kong and to make Hong Kong a world-class telecommunications centre for doing business. The telecommunications market in Hong Kong is highly liberalised.
As a leading finance, trading and transportation centre in the world, Hong Kong provides an excellent market for telecommunications services. Businesses and people in Hong Kong are receptive to new telecommunications services.
Electronic Transactions Ordinance. This provides a legal framework for electronic transactions. Public key infrastructure (PKI) was also established. Key features include legal recognition to electronic records and digital signatures, adoption of asymmetric cryptosystem, establishment of a voluntary recognition system of certification authorities and the creation of recognised certification authorities.
Telecommunications Ordinance. This Ordinance brings together all the existing legislation. Anti-competitive provisions have been introduced (into the new Broadcasting Ordinance also) in addition to existing licence conditions.
The regulator, the Office of the Telecommunications Authority, has the power to suspend or fine a licence holder for anti-competitive behaviour.
Digital 21, the Hong Kong government's IT strategy which was launched in November 1998, is overseen by the Information Technology and Broadcasting Bureau (ITTB). Digital 21 is positioned as a comprehensive strategy to enhance and promote Hong Kong's information infrastructure and services. The government has created a framework for the development of e-commerce in Hong Kong through the following:
- Electronic Service Delivery Scheme - Government online. From October 2000, government departments and public agencies provide a range of services that include: payment of government bills, tax returns, renewal of licences and other information. Terminals have been placed in public places.
- The government will also adopt a common Chinese language interface to facilitate the conduct of e-commerce in Chinese.
Market Outlook
Investment opportunities in Hong Kong are abundant. In October 2001, HKSARG has issued 4 licences for 3G mobile telecommunications services in Hong Kong. More business opportunities are now available to mobile service providers in the form of the MVNO services.
In the areas of Internet service providers (ISP) and value added telecommunications services, there is no limitation on the number of licences. Companies interested in providing these services in Hong Kong can apply for appropriate licences from OFTA.
With China’s accession into the WTO, the vast telecommunications market in China will be opened up progressively. There will be many joint venture and business partnership opportunities between the Mainland China, Hong Kong and foreign companies.
The Hong Kong SAR Government is actively involved in providing a conducive environment - Science Park, Cyberport, Innovation and Technology Support Funds and online government. Together with the rapid growth in e-commerce, the demand for faster and higher quality telecommunications services and facilities will further increase in Hong Kong and hence provide more investment and business opportunities for both local and foreign
companies