Tuesday, October 11, 2011

HKBN: "we like being a very fat and dumb pipe"

City Telecom (HKBN) was present at the recent Broadband World Forum in Paris. The CEO and CTO talks were put online and gave some background on the company's strategy, the bottom line of which is to provide 1 Gb/s at EUR 18 (USD 26) per month.

They have stated before that they are "out to commoditise bandwidth". The new catch phrase could be: "we like being a very fat and dumb pipe".

Some of the highlights:

  • Its BHAG was to become #1 after 10 years i.e. in 2016 in the four-player Hong Kong market. By 2011, it is #2. And HKBN is larger than #3 and #4 combined.
  • There are 3 drivers: the receding recession, dense population and the geography.
  • Lacking any legacy networks also determines the strategy.
  • Capex is just USD 200 per home.
  • In highrises, routers are installed every 10-12 floors, with Cat 5E cabling reaching to every home. It guarantees 100/100 Mb/s to 80%.
  • For running the company, there are the three E's: entrepreneurship, execution and engagement.
  • It has to be kept in mind that the 1 Gb/s at EUR 18 is just a starting point for the company's marketing machine. Within three weeks, the sales organisation starts calling new subscribers to upsell services such as VoIP and IPTV.

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