Future Broadband Business Case Unclear, Says HKBN CTO

Telcos today face rich opportunities but the business case for future broadband investment is a difficult one, Hong Kong Broadband Network CTO Gary McLaren believes.

Hong Kong Broadband Network Ltd. (HKBN) 's strategy has empowered it to realize 15 years of continual growth in revenue and EBITDA while competing with incumbent PCCW/HKT, said McLaren. While the early days of broadband rollouts were clear-cut, today's strategy is less apparent, he said.

"Back then, it was easy to see video would fill up pipes," McLaren said.

Beyond video, the human brain can only absorb so much information, so "we're probably at the top of the S-curve in terms of demand for broadband," he added. (See How HKBN Has Built a Business Around OTT Video)

Now it's about incremental improvements such as latency -– for example, reducing the time it takes for the channel to change to one second, which would require additional network capacity, McLaren told UBB2020 in an interview.

"Building that business case today is very difficult today," he said.

For a broadband operator, the investment decision is about market share -- gaining a competitive advantage or differentiation that can deliver value for the customer.

But while future broadband investment horizon is not clear, "a world of opportunity" faces operators today, McLaren told the Broadband Forum Asia conference in Hong Kong this week.

Growth will derive from "the combination of hundreds of thousands of different apps and different use cases, and that will continue to drive the investment in networks and the ability to profit off those investments."

HKBN will seek partners to deliver many of the services up the stack, he said.

"But our bread and butter is delivering the high quality broadband dumb pipe that delivers the services and quality that people are looking for," he said.

Related posts:  

• Hong Kong Blazes an Ultra-Broadband Trail
• Broadband Future Looks Like Video
• Colt Exec: Over-Provision Broadband Today for Customer Satisfaction, Growth

    — Robert Clark, writer, @electricspeech.