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.