PCCW HKT Stands out amidst the crowd

Five mobile operators and eleven LTE networks are competing for Hong Kong’s seven million residents; among them, PCCW-HKT is a leading operator in Hong Kong. Dr. Henry Wong, the operator’s Senior Vice President for wireless, sheds some light on the operator’s secrets to success – broad Wi-Fi coverage, RAN sharing, strong backhaul (FTTS) provisioning and matched pricing for 3G and 4G.

By Julia Yao & Linda Xu

Five mobile operators and eleven LTE networks are competing for Hong Kong’s seven million residents; among them, PCCW-HKT is a leading operator in Hong Kong. Dr. Henry Wong, the operator’s Senior Vice President for wireless, sheds some light on the operator’s secrets to success – broad Wi-Fi coverage, RAN sharing, strong backhaul (FTTS) provisioning and matched pricing for 3G and 4G.

A very, very saturated market

WinWin: What major developments have there been with regards to LTE in Hong Kong this past year?

Wong: The data growth in Hong Kong has been doubling every year during the past couple of years. The OFCA (Office of Communications Authority) issued three LTE FDD licenses on 2600MHz in 2009, three LTE TDD’s on 2300MHz in 2012, and four additional LTE FDD licenses on 2600MHz in 2013. There is also a total of 230MHz of new spectrum for both LTE FDD and LTE TDD networks granted by the OFCA in the past few years. In addition to the new spectrum, operators in Hong Kong have refarmed their existing 1800MHz bands for LTE services due to the declining demand of GSM services. In HK, there are a total of ten LTE networks - nine LTE FDD networks and one LTE TDD network. HK is a very mature LTE market, with all LTE networks carrying live traffic. The mobile market is very saturated, with the penetration rate exceeding 220% in April 2013.

WinWin: In PCCW-HKT’s case, how is the LTE data market going when compared with that for 3G, particularly in terms of the pricing strategy?

Wong: Our marketing strategy is to encourage 3G customers to enjoy the best mobile broadband services while still paying the 3G tariff. As long as customers start to use 4G handsets, they can use the 4G services. Now the adoption rate of 4G very much depends on the market uptake of LTE handsets in Hong Kong. Currently, there are about 10 to 20% of users already active on 4G services.

Our 3G tariff and 4G tariff is basically the same. We are not charging more for 4G services, so long as users are paying for a tariff plan in 3G. For example, if they pay a fixed monthly fee for 10GB, this package is also applicable to 4G. PCCW-HKT has stopped offering unlimited data plans. Our package is only based on tiered data volume pricing. Initially, 5GB was the most popular among customers. Right now, more and more people are using 10GB. We have just offered an 80GB plan recently with our launch of a Cat 4 (Category 4) smartphone capable of achieving a 150Mbps data speed. So, when LTE is moving faster and faster, people will consume more data. And we will roll out a high data-volume plan at a higher price, which will help increase our ARPU.

WinWin: What’s PCCW-HKT’s LTE network rollout status and next moves?

Wong: PCCW-HKT launched its LTE network on 2600MHz in April 2012. We also refarmed 1800MHz for LTE early this year. Right now, we are providing territory-wide LTE coverage with LTE1800 as a coverage layer and LTE2600 as a capacity layer. There is 20MHz bandwidth at 2600MHz, which gives us 150Mbps on the full LTE carrier. We have also offered Circuit Switched Fallback (CSFB), which has carried live traffic since last year. As soon as handsets become available later this year, we are ready to launch VoLTE services.

WinWin: Hong Kong’s urban areas are as dense as any on Earth. How advanced are your small cell plans and what’s your strategy for integrating them into your network in order to accommodate all that data?

Wong: Currently, we have deployed over 600 femtocells in Hong Kong for 3G coverage fill-in. However, femtocells have a deficiency in their interference with macro cells, making them ill-suited for capacity expansion. Small cells play an important role in HetNet architecture for the purposes of capacity expansion. One of the technical challenges of deploying small cells is the extensive provision of their fiber backhaul everywhere. To streamline the backhaul provisioning, PCCW-HKT redesigns their backhaul architecture with local exchanges to host the edge transmission router, which serves as the concentration hub for the small cell connections. With this, we have shortened the distance of the fiber at the local exchanges before routing to the metro IP and then to the mobile switching center. The local exchanges are also serving as the BBU hotels as well.

Wi-Fi: PCCW-HKT’s strong suit

WinWin: PCCW-HKT regards its extensive and reliable Wi-Fi network as a key differentiator. How is its customers’ Wi-Fi experience different from those offered by competitors and what are the key technical innovations behind it?

Wong: PCCW-HKT is the largest Wi-Fi provider in Hong Kong, with over 12,000 Wi-Fi hotspots as compared with about 2,000 cell sites for the mobile network. We intend to provide the best Wi-Fi experience to the user, covering both indoor and outdoor areas, including bus stations, the subway (including onboard Wi-Fi access), ferries, shopping malls, restaurants, coffee shops, universities, and other social hubs.

PCCW-HKT has a long history in Wi-Fi networks, particularly in integrating the mobile network and Wi-Fi, already integrating the mobile and Wi-Fi system together using EAP-SIM authentication in 2008. Users can authenticate seamlessly onto the Wi-Fi based on SIM credentials. In 2011, we implemented a few trials with hotspots 2.0 that were intended to improve access to the Wi-Fi network. In July 2013, we also launched 802.11ac, which gives the maximum speed to our users. We now are also implementing the combination of data sessions between the Wi-Fi and mobile network by using a wireless LAN-LAN gateway, so the user plane and the control plane are integrating with our mobile network together. Next year, we’re looking forward to implementing the Access Network Discovery and Selection Function (ANDSF), which would give users seamless access to mobile and Wi-Fi services under the QoS control.

WinWin: What is the pricing model for Wi-Fi, and what benefits have you gained from Wi-Fi operation?

Wong: Investment in Wi-Fi networks is not that cheap. The price of Wi-Fi access-point equipment is reasonable, but backhaul for the provision of Wi-Fi is very expensive. Basically, the Wi-Fi charge is a bundled service in the mobile tariff plan, as our service differentiator. The benefit for us is offloading traffic onto the Wi-Fi. Whatever speed and capacity are given to the user, the user will always use it up. That (the Wi-Fi) will help us maximize the network capacity, so that users can enjoy the best mobile broadband services. Besides, the deployment of Wi-Fi paves the way for us to develop small cell technology in the upcoming future.

RAN sharing

WinWin: PCCW-HKT and Hutchison share a 2600MHz LTE network. While network sharing works for LTE, some operators find QoS a major challenge as a QoS model has not been defined by the 3GPP. Is QoS an issue for PCCW-HKT in this case?

Wong: For our MOCN RAN-sharing architecture, the shared network is on RAN only. The MOCN architecture enables separate EPC cores, which allows each party to have their own switching platforms, their own HLR/HSS subscriber databases, and their own PCRF for QoS control management. The MOCN architecture enables each party to develop its own service applications, provisioning and tariff plans. Under MOCN architecture, Huawei provides the flexible radio resource allocation. That means that each party can share radio resources in the eNodeB. One subscriber of one party in the cell can use up all the radio resources of the cell to achieve the peak data rate. However, if there is another user of the other party joining in the cell, it will automatically switch back to 50/50 resource sharing. He can enjoy the fair use policy between the two parties. With this, each party will maximize the usage of their radio resources and maintain a fair level of operation and utilization of radio resources, so I don’t see an issue of QoS under the MOCN arrangement.

WinWin: In addition to technical support for MOCN RAN sharing, what other expectations or demands does PCCW-HKT have in Huawei’s end-to-end solutions?

Wong: PCCW-HKT has been deploying Huawei’s end-to-end solutions on its 2G, 3G, and LTE networks, including MSC, EPC, and PCRF. In the past, it was a siloed network with different technologies. But right now, the network is becoming more integrated and intrinsic due to spectrum refarming with different technologies on various bands, network resource pooling across 2G/3G/LTE networks, IP core and IP-RAN backhaul sharing, and even MOCN RAN sharing. Once the architecture is integrated together, we will need to have other technical solutions. For example, for fault management, in the past, iManager M2000 looked at 2G only and we had another iManager M2000 for 3G or 4G only. Right now, we only need one single iManager M2000 looking at the integrated network. The fault management must have additional functions to precisely identify the network component for configuration management, troubleshooting, and fault recovery. The network architecture has changed. All these things require a new thinking on how to provide an end-to-end solution in this environment.