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Hong Kong 4G traffic to overtake 3G in 2013

Rise in LTE adoption reflects need for regional telcos to work toward Wi-Fi offloading, shift to volumetric pricing as well as work with OTT players.
Written by Ryan Huang, Contributor

SINGAPORE--With more new LTE handsets and OTT (over-the-top) offerings entering the market over the next year, overall data consumption will not only rocket but also will increasingly ride on 4G networks.

Traffic growth over LTE networks, at least in Hong Kong, is expected to "be very fast", according to Christian Daignault, CTO of Hong Kong mobile operator CSL, who was speaking at a panel discussion held here Tuesday at the LTE Asia 2012 conference.

"From now on, all handphones will be released with 4G [and] it will take just one year for 4G to surpass 3G [in Hong Kong]," Daignault said, noting that there were already five LTE service providers in Hong Kong.

This growing demand will likely further strain telecom service providers which will need to find ways of coping with the data crunch, such as Wi-Fi offloading, he added.

For example, the CTO pointed out that his peak hour usage was usually at midnight, which was when families tended to use their devices together at the same time. "The [data] traffic jams are where people are at home [where] there could be two or three people watching TV on their tablets," he said.

This was one example of "wasteful" consumption and CSL aims to incentivize such users to switch to Wi-Fi, he added.

Importance of volumetric plans
Daignault said part of this move will require telcos to move toward volumetric pricing "to reduce waste" and treat the network bandwidth like electricity or water utilities. CSL still offered a price plan which was "unlimited", but operators in general have agreed such offerings will need to be phased out, he added.

Agreeing, another speaker on the panel, Choi Jin-sung, head of technology strategy at SK Telecom, said his company has been moving toward this model and offering free service together with these plans, such as e-books and movies, to make them more attractive.

As part of such efforts, Daignault said it would also be important for telcos to have a strategy to address OTT services, which have been slowly eating away at their revenues and becoming increasingly dominant, through offerings such as free voice calls and messenging.

Telcos could also provide a different quality of service from OTT players, noted the CSL executive. This would be increasingly important as some services require a guaranteed level of performance and when more applications enter the market and add further strain on the network, he explained.

According to Mock Pak Lum, CTO of Singapore operator StarHub, telcos can also consider working with OTT players by leveraging their current relationship with customers.

"What we have is analytics. We know where our customers are, who they are calling, where they are visiting," said Mock, noting operators had the power to mine and offer this data to OTT players as a value-added advantage.

Sadayuki Abeta, director of radio access network development at NTT Docomo, said telcos could also offer translation services in real-time. He said the Japanese telco is currently conducting trials of this service.

Looking at VoLTE
With the limited spectrum, Daignault said telcos also will start moving toward voice over LTE (VoLTE) where voice traffic is carried over LTE networks instead of older networks such as 2G and 3G, which can then be refarmed.

However, he pointed out that it would likely take several years for the technology to reach maturity.

Peter Zhou, vice president of LTE wireless network at Huawei, told ZDNet on the sidelines of the event that VoLTE adoption currently is held back by the availability of compatible devices, even though the network infrastructure is already ready and available in places such as Singapore.

According to SK Telecom's Choi, VoLTe is already commercially available in South Korea. Besides device availability, he noted that success factors for adoption of this service are better quality differentiation and attractive pricing plans.

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