PCCW-HKT: Better connected families through UBB

Hong Kong is one of the world’s most connected markets, and PCCW-HKT has been instrumental in its world-leading “average peak connection speed” of 106.7Mbps (according to Akamai’s State of the Internet reports) over its fiber, which reaches 79% of Hong Kong households via FTTH. However, ultra-broadband is merely a means to an end for this operator, as PCCW-HKT is committed to the comfort, convenience, and efficiency of its customers’ lives, using home networks as a platform for smart living services such as e-education and healthcare. Paul Berriman, PCCW-HKT’s Group CTO, has the details.

By Linda Xu & Jason Patterson

Hong Kong is one of the world’s most connected markets, and PCCW-HKT has been instrumental in its world-leading “average peak connection speed” of 106.7Mbps (according to Akamai’s State of the Internet reports) over its fiber, which reaches 79% of Hong Kong households via FTTH. However, ultra-broadband is merely a means to an end for this operator, as PCCW-HKT is committed to the comfort, convenience, and efficiency of its customers’ lives, using home networks as a platform for smart living services such as e-education and healthcare. Paul Berriman, PCCW-HKT’s Group CTO, has the details.

Competitiveness amidst a crowd

WinWin: Hong Kong is a very advanced market. How has PCCW-HKT attained and maintained leadership without making it a mere speed game?

Paul Berriman: One of the main reasons that Hong Kong has the fastest average broadband Internet speeds in the world is that we have five fixed operators (all facilities- based), four mobile operators and four pay-TV operators. It is a very competitive environment. Over 75% of buildings have two facilities-based broadband providers and over 58% of buildings have three. This competition drives up broadband speeds as a competitive selling point.

Price is another factor and the newer operators have been driving broadband prices down to a commoditized level. Therefore, speed alone is not enough to differentiate or to retain customers. We cannot be just a dumb fat pipe utility business. We decided that any new revenue growth would have to come from new services such as content, applications and transactional services. Hopefully these new interactive services would create stickiness in our traditional access products and reduce churn.

The first of those services was our NowTV IPTV service, launched in September 2003, which is now the largest PayTV service in Hong Kong and possibly the largest IPTV service in the world by penetration as it is in over 58% of homes. That product itself had a major impact on our broadband lines, reducing churn by over 50% and helping to maintain broadband ARPU as well as building a TV content revenue stream in its own right. We continue to use this and other similar services such as Smart Living and uHub personal cloud storage to further maintain the leadership. We introduced “SuperHD” coverage of the Barclays Premier League to drive the take up of our FTTH service, which can be delivered in four days to about 80% of homes in Hong Kong. We now have almost 500,000 FTTH customers; around a third of the total residential broadband base (with an additional 120,000 customers on high speed VDSL).

WinWin: Your NowTV IPTV service represents PCCW’s attempt to leverage the OTT business model. How has it been working out for you, thus far?

Berriman: NowTV is both a managed IPTV service, while NowPlayer is an OTT version. Currently, NowPlayer is working with OTT players on any broadband line, fixed or mobile, but still requires a NowID associated with the managed IPTV service. The only real difference between the managed IPTV service of NowTV and the OTT of NowPlayer is that we have not yet been able to license all the NowTV content for NowPlayer. At some point, both will converge on identical content libraries, but not quite yet.

We may consider introducing a payment gateway so that NowPlayer can become fully OTT, but there is a fine balance between protecting our own broadband access and growing the NowTV service. Meanwhile, we are exploring ways to offer our NowPlayer as a cloud TV service and are already selling our Chinese programming and channels to overseas PayTV providers in Thailand, Malaysia, Singapore, Indonesia, Canada and the U.S., amongst others.

We have also integrated OTT versions of HBO Go and Fox Movies Prime as OTT services apps in Hong Kong in the same way as we have NowPlayer for NowTV. We also have Fox Movies and HBO on NowTV, often different in content from the IPTV versions.

Living smartly

WinWin: How does PCCW-HKT’s ultra-broadband-enabled service and solution lineup for households and enterprises (100Mbps to 1Gbps) keeps you competitive?

Berriman: With over 86% of buildings in Hong Kong having fiber to the building and 79% of homes having fiber verticals in the building, we can deliver speeds from 30 to 1000Mbps within four days of order. Those we cannot access easily with fiber, usually due to riser blockages or customer decoration issues (the primary socket being covered and inaccessible to pull the fiber), then we use a VDSL or FTTD solution from Huawei.

In the home, we have a range of products and services which are collectively known as Smart Living, for home entertainment (such as NowTV, Moov music and MoovLive music video streaming), home control, security monitoring, eSmartHealth and the EYE (a tablet for home entertainment, home control and broadband replacement for the old PSTN fixed line telephone). We also provide home networking and Smart Living consultancy services to help customers design and build their smart homes.

Typical enterprise services over broadband include Smartline and enterprise cloud services. Smartline covers voice and messaging services on broadband, with support and messaging access via a web portal. It also extends office services including voice to mobile phones as office extensions, including presence management. Enterprise cloud enables customers to manage virtual infrastructure and applications such as cloud storage, web meetings, HD switched video conferencing and cloud-based office applications, including support for a number of industry verticals.

One of those verticals is HKT education, which provides fiber broadband to schools and provides learning management systems to those schools enabling teachers to prepare and manage their curriculums with reading materials and teaching aids, available to students on tablets, but under the control of the teacher. We extend this capability for students to use the learning management system (LMS) from their home when it comes to working on their homework. All materials are protected by digital rights management in a similar way as we protect the TV content on NowTV. Lastly, we even have a fiber to the yacht service for “detachable” broadband connectivity to boats moored in the marinas dotted around Hong Kong’s coastline.

WinWin: What are your expectations for further ultra-broadband development into Smart Living applications?

Berriman: PCCW-HKT provides broadband to over 68% of homes. NowTV is in over 58% of homes. This means we have a number of devices in the home already including modems, STBs and the EYE device. These devices are already connected via wire, Wi-Fi or power line, thus creating a home network in itself. All of these devices are monitored and managed from our network operation center (NOC) or eCentre. Our vision is to be able to do this for all connected devices so that we can discover and configure all manner of devices for the customer. It will also make monitoring and maintenance faster and more efficient, for an unbeatable customer experience.

For example, when you look at extending e-health from the current range of wellness management devices to those for remote patient monitoring of post-operative care, someone has to install and monitor those devices to ensure that they are working correctly and at their best for the patient at all times. This is not a core competence of the healthcare providers. A telecom operator, with its team of field service engineers and rapid time to response, can install these devices and through the home network, which is in the end really just an extension of the telco’s network. The operator can help monitor their performance and detect problems. That is where we might be able to go in adding value to the home network and whole smart living ecosystem.

Besides, we are working with home automation and monitoring vendors to install systems to control lighting, air conditioning, curtains, now known as “window treatment” as often curtains are replaced with blinds, security cameras, door entry systems and of course home entertainment systems. As we move towards more and more machine-to-machine devices, the Internet of things and a greener world, we may move into other such devices as smart energy and intelligent electric car charging networks in apartment buildings, and other similar innovations.

Gearing up for UBB

WinWin: How does PCCW plan to upgrade its legacy copper and fiber infrastructure in the next few years for the UBB era?

Berriman: PCCW-HKT has little or no intention to upgrade copper. In fact, we are endeavoring to migrate many customers as quickly as possible to what is a fairly future-proof FTTH. It is based on Huawei’s GPON technology and dimensioned for up to 1Gbps of service. It is easily upgradeable to higher orders such as 10G-PON and TWDM-PON, when we need to do so. We see a 1Gbps service as being easily sufficient for the UBB era, at least in the foreseeable future. The main driver will most likely be 4K/8K UHDTV and a 1Gbps service will easily support a number of streams of this to the home.

However, we still have a number of low-rise and rural areas where laying fiber is less than viable. Fortunately, we have VDSL2 Vectoring solutions from Huawei, in those less common circumstances, giving us 100Mbps capabilities which we hope and expect will be lifted in future with new technologies such as G.hn and G.Fast for up to 1Gbps.

WinWin: How will PCCW leverage fixed-mobile convergence in the future?

Berriman: In many respects, we have been leveraging fixed-mobile convergence for some seven years now, since the introduction of our 3G service and the creation of our quadruple play platform through which we can deliver content to the TV, tablet, mobile and EYE fixed broadband phone. Our idea of quadruple play is to deliver content to these platforms, fixed or mobile (wherever possible from a licensing point of view). That really defines our fixed-mobile convergence from a content quadruple play point of view.

In the enterprise space I have already mentioned the convergence we now provide in the office, with unified messaging and extending the office communications capabilities to the mobile with the HKT Smartline service.

There are other ways we are leveraging our fixed-mobile capabilities towards convergence. Part of this comes with our over 14,000 Wi-Fi hotspots, which are integrated with the mobility management of the mobile network to give seamless integration and handoff to smartphones and tablets from the mobile networks whenever in reach of one of our Wi-Fi hotspots. This allows for efficient data offloading as well as better QoS for customers, especially those watching video or TV content on NowPlayer.