Telstra sells out of CSL

One thing we can say for certain about Telstra’s exit from CSL: that’s the last foreign-controlled telco we will see on Chinese soil.

Telstra’s 76% stake in CSL not only seemed an anomaly in Hong Kong, it seemed anomalous to Telstra. The business fell into its hands as part of the disastrous Reach JV back in 2001 as Richard Li threw assets overboard to stay afloat. 

Unlike Telenor or SingTel, Telstra never made any serious attempt to build offshore mobile business group. Now, on its umpteenth global strategy, it’s focusing on the enterprise/cloud/managed services market. CSL remains the odd man out.

The sale price of $2.43bn (A$2.73bn) is well down on the A$4 billion it paid back in the day, though it represents a A$600mn profit on the marked-down book value.

The other, more striking point in this is HKT’s offer to surrender all of its 3G spectrum in 2016. That includes its own 2x15MHz as well as that of CSL.

HKT says it can do that because it now has access to sub-1GHz frequencies, including 850 MHz and 900 MHz, as well as 1.8 GHz, 2.1 GHz and 2.6 GHz. Additionally, it says it will no longer have to pay the accompanying spectrum fees.

This comes hard on the heels of Ofca's unpopular (with operators at least) instruction that Hong Kong operators to surrender a third of their 3G spectrum for re-auction in 2016.

Whatever the reason, this generosity, surely a first in the history of mobile, does a favour both to Ofca and in particular China Mobile by ensuring a discount on the auction price. Happy Christmas to both of them. 

HKBN dives into Wi-Fi

Ground-breaking broadband player Hong Kong Broadband Network (HKBN) has moved into wireless, promising to make “low-cost or no-cost” Wi-Fi ubiquitous following its acquisition of the city's s biggest Wi-Fi wholesaler, Y5Zone.

It's planning a HK$200m ($26m) upgrade in the next 12 to 18 months to more than double the number of hotspots to 15,000 and boost bandwidth speeds from 100Mbps to 1Gbps. 

While the city is already heavily-connected via 3G, 4G and broadband, Billy Yeung, the head of HKBN Wi-Fi, says the Wi-Fi market is still in its infancy. He sees opportunity in the rising data demand, the number of Wi-Fi devices and the massive influx of mainland tourists.

Hong Kong has 13m mobile connections, or an ownership rate of around 185%, and mobile data use is expected to increase 53 times between 2010 and 2020. Around 70% of phones in use are Wi-Fi-enabled smartphones. 

The number of mainland Chinese visitors has doubled in the past four years and is likely to have topped 32m in 2012. 

HKBN hasn’t announced pricing, but CFO NiQ Lai said the aim would be to offer at “low-cost or no-cost – maybe it will be free for the first 20 minutes.” The idea was to make it ubiquitous and affordable to everyone, he said.

Privately-held HKBN will not disclose the acquisition price, which is partly in stock. The company went private last year and is now owned by senior managers and private equity firm CVC Capital.

HKBN is Hong Kong’s second largest fixed-line broadband provider. Its all-fibre network connects to 85% of households and offers packages of 100Mbps for HK$168 ($21.80) and 1Gbps for HK$268.

“We think of not hotspots but ‘hotzones’,” said Yeung, an industry veteran who founded PCCW’s ISP arm in 1993 and set up Y5Zone 11 years ago. “Instead of a single hotspot in a mall, we will cover the whole mall.”

“Hong Kong may not have the most number of WiFi hotspots in Asia, but we hope to have the most sophisticated users of any Asian city,” he added.

Y5Zone will continue its Wi-Fi wholesale business, which supplies connectivity to every major telco except for incumbent PCCW.

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