To all, More on the Hong Kong GSM/cdmaOne price war...
Price War Starts as Hong Kong Debuts Portable Phone Numbers
December 30, 1998 (HONG KONG) -- Hutchison Telecommunications
Ltd. is ringing in the new year with a bang: with 1999 around the corner, it is
reducing its mobile phone charges by 83 percent.
The move, announced on Dec. 18, is seen as an initiative to prevent a
massive loss of its customers in March 1999, when Hong Kong introduces
mobile number portability (MNP) technology.
With MNP, mobile phone subscribers can retain their assigned phone
numbers when they switch from one operator to another. The need to change
phone number has been considered a major obstacle for people who wish to
change mobile phone operators. Therefore, the introduction of MNP is
expected to start off a new round of fierce competition among mobile phone
operators, especially those with higher charges.
Hutchison is the second-largest mobile phone operator in Hong Kong, where
six operators are sharing a total of 2.6 million customers. Four different
mobile phone systems are currently available: GSM (global system for mobile
communications), PCS (personal communications services), CDMA (code
division multiple access) and D-AMPS (Digital-Advance Mobile Phone
Service).
The majority of mobile phone users subscribe to GSM service, as its
networks are considered better developed. But in the past year, PCS
services have been gaining ground, with subscribers almost tripling from
241,000 at the end of 1997 to 650,000 by October 1998. Many GSM
customers have been attracted to PCS because of lower charges and the
attractive packages put together by the major PCS operators.
The price cut taken by Hutchison has also effectively eliminated the price
differences between its GSM and PCS services. This is seen as a measure to
discourage its GSM customers from switching to PCS service.
Other mobile phone operators are reacting to Hutchison's price cut with
caution.
SmarTone Mobile Communications Ltd. lowered the price of its basic GSM
plan to a level comparable to Hutchison's. New World PCS Ltd. reacted by
offering lower charges to some new customers. Hong Kong Telecom-CSL,
the market leader, is expected to follow suit.
Since October 1998, mobile phone operators with both GSM and PCS
licenses have been allowed to operate dual-band services. As dual-band
customers (who must use a dual-band handset) can enjoy the coverage of
both GSM and PCS networks, the reception quality is generally better.
Both Hutchison and Smartone have launched dual-band services and
encourage their customers to switch to dual-band by charging the same
GSM tariffs and offering other incentives. It is hoped that the better reception
quality of dual-band service can also help retain customers when MNP is
introduced next year.
Table 1 Mobile Phone Operators in Hong Kong
Operator System/s used
Hong Kong Telecom-CSL GSM, PCS, D-AMPS
Hutchison GSM, PCS, CDMA
New World PCS
Peoples PCS
Smartone GSM, PCS
Sunday PCS
Table 2 Mobile Phone Subscribers in Hong Kong
Year Subscribers
1987 28,060
1988 51,280
1989 89,193
1990 133,912
1991 189,664
1992 233,324
1933 290,843
1994 431,775
1995 687,600
1996 1,210,680
1997 2,085,600
1998* 2,639,466
Notes: *Jan-Oct. Source: Telecommunications Authority.
(Keith Chan, Asia BizTech Hong Kong Editor) |
