Hong Kong’s mobile broadband war is spilling out into the fixed-line sector as two cellcos are now betting on 3.5G as a DSL substitute.

 

SmarTone-Vodafone kicked off the trend in May last year with its Home Broadband and Phone service, which leveraged its HSPA network against PCCW’s voice/fixed-broadband package. In late January, Telstra-owned CSL made a similar move with Next G Lifestyle Home Broadband under its one2free brand.

 

The services are similar in that they offer a wireless gateway that uses 7.2-Mbps HSPA as the last mile link. Customers can connect to the gateway either via Wi-Fi or Ethernet cables, and can also plug in analog phones for voice calls.

 

The chief difference for CSL, says Han Kotterman, chief strategy officer for CSL’s strategy and business development team, is indoor coverage.

 

“We offer 3G on 900 [MHz], which no one else in Hong Kong has,” he told telecomasia.net. “With 900 coverage you get much better indoor penetration of the signal, so that helps us to deliver a broadband experience in the home as it was meant to be.”

 

Kotterman also points out that CSL is offering a higher uplink speed (5.76 Mbps vs. SmarTone-Vodafone’s 2 Mbps).

 

CSL isn’t just using its network to differentiate itself – there’s also a “Follow Me” single-number feature that allows mobile voice usage at home to be counted under the home voice package.

 

Still, the real question isn’t how CSL and SmarTone will fare against each other, but how their offerings will play in a fixed-broadband market where PCCW and HKBN already offer speeds as high 1 Gbps (albeit at almost 20 times the price) and minimum speeds of 8 Mbps for PCCW Netvigator and 10 Mbps for HKBN.

 

However, there are a few novel selling points in the 3.5G model.

 

One is that the installation is dead simple and fast compared to having to make an appointment for a technician to come in and install a modem. That also means the gateway isn’t tied to the phone jack outlet, so users can move it around at will (which helps in the sense that Hong Kong’s concrete flats make Wi-Fi coverage a challenge – a 3G gateway allows you to take the access point with you if you move to another room).

 

Also, SmarTone and CSL seem to be betting on the fact that while Hong Kong is a saturated and competitive broadband market – with close to 80% penetration and four broadband services providers (plus another 160+ licensed resellers), according to Ofta – that doesn’t mean everyone has plenty of options, or are happy with the ones they have.

 

The four main broadband providers – PCCW Netvigator, HKBN, Hutchison’s HGC Broadband and iCable – do have overlapping service areas, but there are still a number of areas where only two of them might be available, and if there’s only one choice, it’s probably going to be Netvigator.

 

Kotterman adds that while HSPA might not look impressive compared to fiber, there are plenty of places in Hong Kong where FTTx isn’t yet available. “That’s especially true in the outlying areas, which is where we’ve seen the most uptake so far,” he says.