HKNet Forms JVs With Teligent, NTT
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The HKNet-Teligent venture will be 51 percent owned by HKNet, 40 percent by Teligent, and 9 percent by CCT Telecom, the majority investor in HKNet. The JV will apply for a Wireless Fixed Telecommunications Network Service (W-FTNS) license in Hong Kong in order to offer wireless broadband services.
As Antonio Tambunan, BNP's Internet analyst, points out, HKNet is positioning itself as more than an ISP but as a full-service telecommunications carrier providing basic telephony, data network services, as well as broadband Internet services. The venture plans to target over 90 percent of local businesses and residents within 3 years of operation.
The service will be deployed by installing small roof antennas on customers' buildings which will relay voice, data, or video signals to a HKNet-Teligent base station antenna.
The venture will be 70 percent owned by NTT (HK), 20 percent by HKNet, and 10 percent by CCT Telecom, and will apply for an External Fixed Telecommunications Network Service (E-FTNS) license for IDD.
The wireless venture, however, has several obstacles.
The HKNET-Teligent wireless venture faces major competition from other new fixed wireless licensee candidates such as City Telecom and SmarTone Communications and incumbent operators like iCable, Cable & Wireless HKT, and Hutchison Telecom.
All of these players are positioning themselves as integrated Internet and telecom operators.
Moreover, as Tambunan points out, fixed wireless technologies (LMDS or microwave), are new technologies and Hong Kong's skyscraper-filled vertical topography may challenge these technologies which have, up to this point, only been used in the relatively flat topographies of the United States.
According to most industry observers, the crucial potential barrier to HKNet's wireless network deployment is the large propery firms. Over 50 percent of the most significant properties are owned or managed by Sung Hung Kai (SHK), Wharf and Cheung Kong.
This presents a conflict because SHK owns 26 percent of Smartone, Wharf owns 100 percent of iCable, and Cheung Kong owns 50 percent of Hutchison Telecom.