Hong Kong operators turn to LTE to combat OTT threat

Michelle Clancy | 18-08-2013

The telecom market is rapidly evolving, and no more so than in Asia. Drilling down into just one market segment, over the next five years operators in Hong Kong should seize opportunities in LTE-powered data services and devices, and develop strategies to combat the threat posed by third-party OTT apps, according to a new report from Pyramid Research.

"Adoption of 3G technologies peaked in 2012 at 68% of the mobile base and is projected to decline starting in 2013 as a result of increasing availability of LTE networks and devices," said Pyramid Research analyst Hansang He.
LTE subscriptions, first available to Hong Kong consumers in 2011, are expected to reach 15 million by 2018, 75.7% of the total mobile base in Hong Kong, thanks to aggressive efforts by operators to migrate customers with handset subsidies and pricing comparable to 3G.
"For operators, OTT apps remain both a threat when offered by third parties and an opportunity when brought in-house," he added.
Third-party OTT apps threaten operators by competing for data and value-added services revenue. Each operator has undertaken a unique strategy in this regard, such as 3's partnership with WhatsApp and PCCW's proprietary media apps. With their own OTT apps in place, what is imperative next is to strengthen their value and relevance, whereby their uses can be monetised, for instance through a profit sharing scheme built around related services that can be sold and marketed, he noted.