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Hong Kong telco edges out 3G

China Resources Peoples Telephone uses an older technology, Edge, to deliver next-generation data services in order to avoid the high overheads of deploying a 3G network.

SINGAPORE--As the world's telecommunications players get excited over 3G networks, one Hong Kong operator is counting on an older technology to deliver its data services.

Since last year, China Resources Peoples Telephone (Peoples), has been using Edge (Enhanced Data Rate for GSM Evolution) to deliver mobile TV services to its customers. Charles Henshaw, chief executive officer of Peoples said such data services will drive revenue growth for the company, especially in a competitive telecommunications market like Hong Kong. He was speaking at a conference track on mobile operator strategies during the CommunicAsia Summit here.

Edge--often described as GPRS (general packet radio service) on steroids--offers data access speeds that are three times faster than GPRS. 3G data access speeds are about 30 percent faster than Edge.

To maximize revenues from data access, Henshaw said, cost-conscious Peoples wanted a mobile network that was profitable but that could be deployed without the high overheads of a 3G network.

And that is why the operator is choosing to ignore the glamour of 3G, Henshaw said. "The only way to survive is to look at the bottom-line," he said.

In 2001, when 3G licenses in Hong Kong were up for auction, the company spent six months trying to figure out how much 3G infrastructures cost and where the handsets and applications were. "We couldn't put together a business case for 3G," he said.

Henshaw said Peoples chose Edge over 3G because "the technology could offer all the data services our subscribers wanted, at a very reasonable price".

"We compared Edge with 3G, and found that it could do everything that 3G could do, except video telephony. But who wants video telephony? It certainly has not taken off at the moment," he said.

Peoples' mobile TV services allow subscribers with Edge-enabled cellphones access to mobile TV content on the move. This includes short video clips on local and international news, weather and traffic reports, language learning programs and even fortune-telling.

Henshaw said the company decided on its current suite of content offerings after gathering customer feedback: two- to three-minute video downloads on popular topics like news and road conditions. "That's the time people have in Hong Kong. They really like to utilize all the time they have."

Another service that rides on Peoples' Edge network is Mobile Eye, which allows subscribers to install a webcam at home to monitor their children and elderly parents through video streaming.

"What we want to do with video streaming is to get people into the next era of mobile data (access)," Henshaw said.

So far, Peoples' efforts to grow its data revenues have paid off. The company's revenue from data services grew from 0.6 percent in 2001 to 8 percent at the end of last year.