Hutchison Telecom's 3 Hong Kong is stepping up its efforts to bolster its position in the city’s nascent 4G market, with plans to invest between HK$600 million ($77 million) to HK$650 million ($83.7 million) this year on its mobile business.
Daniel Chung, chief technology officer of IT and Mobile at Hutchison Telecom, said the company has set aside HK$1.2 billion to HK$1.3 billion in capex this year, to be split evenly between its mobile and fixed-line businesses.
As part of its 4G expansion plan, 3 HK will deploy by year-end a TDD-LTE network on the 2.3GHz frequency band. The operator acquired the airwaves for the service during the spectrum auction in February.
Commercial TD-LTE service is expected to be rolled out in 2013, Chung said, when dual-mode TDD/FDD handsets and mobile devices are available in the market. This is expected by as soon as the first quarter of the year.
He said the deployment of the dual-mode TDD/FDD LTE network offers the operator additional bandwidth, and will enable it to provide 4G data roaming services with overseas operators on TD-LTE networks.
It will also make 3 HK one of the two mobile operators in the city to operate dual-mode TDD/FDD network. Smaller rival China Mobile Hong Kong also has both 2.6GHz FDD and 2.3GHz TDD spectrum, and plans to deploy the TD-LTE network by year-end.
3 HK, which launched the FDD LTE network last month, aims to have over 2, 000 co-located sites in place by end of this year. The company aims to extend its LTE coverage to reach about the same scale as its 3G networks by Q3, and introduce more than 10 new 4G mobile devices before the year-end, Chung added.
In an attempt to further enhance its 4G indoor coverage, 3 HK has also started reframing the 1800-MHz spectrum originally used for 2G services for LTE. Chung said the operator plans to complete the refarming in 2013. The operator has also started conducting 4G testing using the 1800-MHz band in some MTR stations.
The company will also leverage its HSPA network to support 4G network performance and use dual Gigabyte Ethernet to back up strategic cell sites to ensure connection.
Chung is upbeat on 4G service, saying market statics have showed that there is huge potential for upward migration to 4G service.
According to OFCA, Hong Kong had over 15 million mobile subscribers as of February, of which over 8.3 million or 55% were using 2.5G and 3G services.
Operators meanwhile recorded a remarkable surge in mobile data usage to over 4.1 million gigiabyte last year. This represents 2.2 times the mobile data usage in 2010 and 6.5 times over the same period in 2009.
In 2011, the operator had 2.61 million 3G subscribers in both Hong Kong and Macau, accounting for over 70% of its total customer base, up 27% from a year earlier. Smart device penetration rate in 3’s 3G postpaid customer base climbed from 40% in 2010 to 53% in 2011, reflecting its effort on internal upward migration, he added.
3G APRU rose from HK$229 to HK$248, while average monthly data usage is 1-2GB. Chung said “this proof that there is room for higher APRU, provided that you’ve good content and networks.”