When futurists and sci-fi writers try to describe the future, they often turn to Hong Kong’s vibrant high-tech urban landscape for inspiration. And, they’re not alone. In recent years, top executives from major U.S. cable companies and telcos from around the world have also traveled to Hong Kong to take a look at PCCW’s operations. There, consumers can access a wide variety of interactive content on four screens and remain connected virtually everywhere, thanks to an advanced 3G mobile offering, 4,000 Wi-Fi hot spots, a fiber network that offers IPTV and blazing Internet access speeds of up to 1 gigabyte.
Those ground-breaking services, which include a la carte pricing for its programming, have also made PCCW something of a vision of hell for cable. Since launching its IPTV service, now TV, in 2003, PCCW has wrested significant market share from the local cable company and emerged as the region’s largest multichannel provider.
PCCW’s chief technical officer Paul Berriman talked to Multichannel News contributor George Winslow about a variety of services that could offer a glimpse into the future of bundles and multichannel TV in the U.S. An edited transcript follows:
MCN: Why was it so important for PCCW to expand into television and develop the quad play?
Paul Berriman: As a telco, we’ve seen very stiff competition in Hong Kong in the last 10 years or so. It got to the point where any form of revenue growth for an incumbent telco was tough. Telephone connections and broadband connectivity were very commoditized. It was all we could do to defend our position and maintain our revenue from those types of businesses.
That drove us towards giving customers access to content and applications and transactional services that could produce new forms of revenue.
For us, it is about extending that basic access to a number of different devices that can also deliver TV and interactive services. In many countries, when operators say they have a triple or a quad play, it just means they offer three or four different services. But for us, the quad play is very focused on delivering the same content and same applications to all those devices — TV, PC, mobile and [even a fixed wire line device that has a small video screen and allows the user to make phone calls and access multimedia services].
MCN: What are some examples of the converged services that you are offering with your bundles?
PB: With our platform we have the ability to deliver content for interactive services and develop new interactive services relatively quickly. Banking services, home delivery for fast food and pizza or even a connection to our Jockey Club to bet on horses and soccer are some of the interactive services that we are offering.
On the delivery side, [an example of that convergence] is our broadband product Netvigator. Over the last few years we’ve introduced the concept of the Netvigator everywhere so that you can have a seamless experience of online access and access to multimedia services whether you are using a fixed line connection, Wi-Fi or a 3G network. When you’re on the move, you have the ability with your mobile phone or our PC with an HSPA card to connect to Wi-Fi in one of the 4,000 hot spots in Hong Kong.
In the area of content, I think the most obvious converged service is British Premier League soccer, which is by far the most popular content in Hong Kong. We have it on all four platforms.
While putting content on all four platforms is obvious, we are also extending the delivery of services [from one platform to another]. We have a TV channel where you can watch film trailers. Then, if you go into the interactive mode with that channel, you can buy cinema tickets. And then if you wish you can have the ticket delivered as a multimedia barcode to your mobile phone automatically so you can use it to enter the cinema.
Another example of how services are converging is our photo sharing service. People can take a photo on their mobile phone and upload to the server and then it can be accessed from any of the other platforms. You can call your mother and tell her that if she goes to [a specific] TV channel and key in your phone number, she can see the photo you sent her.
The other thing that is quite interesting in terms of interactive services that the channels themselves are becoming portals [for other services]. If you go to our business news channel, you’ll find it has an interactive mode that allows you to get stock quotes and to buy and sell stocks if you have an account with one of the local banks.
Similarly, if you are watching soccer, you can go into the betting function. So instead of going to a portal to find content, you are going to the content and that content becomes a portal for those services.
MCN: What kind of market share has your IPTV service been able to get versus the local cable operator?
PB: The published figures from the cable company are about 880,000 subscribers or thereabout, and we have about 940,000. We are now in 40% of homes, which is quite significant penetration.
In broadband, we were the first into the market with broadband and we have always had significant market share, which is somewhere between 55% and 60%. We’ve even launched a fiber to the home service last November that has speeds of up to 1 gigabyte.
MCN: What do you think American cable executives might learn from your experience with the quad play?
PB: If you look around the world at what the cable companies are doing with DOCSIS 3.0 and what Verizon is doing with fiber to the home and what we are doing with IPTV, I think that IPTV will become the converging factor for both cable and the telcos.
I don’t think we should see ourselves as cable companies or telcos any more. We should just be media delivery companies and interactive service providers. In time all of us will have two-way capabilities, we will all have fiber going into the building or very close to the building, and the difference between our fixed network and the fixed network of the cable companies will not look too different in the end.
Secondly, I think the cable companies have to get involved in mobile. As bandwidths go up, if you don’t own your own backhaul, you’ll be paying a lot of money for circuits. It will be very expensive if you don’t own your own fiber. So cable companies will have as much of an advantage in mobile as the telcos because of their integrated infrastructure for backhaul and fixed-line access and mobile access.
And cable has expertise in terms of content. I think the telcos around the world are really feeling their way into the best way to get into content. We’ve been lucky because we broke new ground and now have quite a bit of experience. But in other countries telcos are still struggling as to how to deal with content providers.
For more coverage from CTAM Summit '08, click here.