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Executive SummaryHong Kong has been, and continues to be, one of the most sophisticated and dynamic telecommunications markets in the world. This Special Administrative Region (SAR) of China has built itself world-class telecoms infrastructure. At the start of 2005, the territory had 3.8 million fixed telephone lines in service, giving a penetration of 55%, amongst the highest teledensities in Asia as well as in the world. Whilst the fixed-line market has now flattened out, the mobile market has been booming. At the beginning of 2005, it claimed an amazing 8.1 million mobile subscribers, representing an impressive world-leading penetration of almost 120%. This market has probably peaked and, as happened in Taiwan, we can expect to see some rationalisation of the mobile subscriber base during 2005 and into 2006.Digitalised since 1995, the territory has been wired with 400,000km of optical fibre. This extensive broadband network covers the vast majority of households and provides the basis for a wide range of existing and future telecommunications services. As a result of its extensive infrastructure roll-out, Hong Kong moved quickly to provide more than 90% of households with broadband access. Broadband subscribers in Hong Kong had jumped to 1.6 million by early 2005, having increased by 1 million in just three years.The contribution made to progress in the telecommunications sector by the Office of the Telecommunications Authority (OFTA), Hong Kongs regulator is of particular note. Since 1998 the government has adopted a strongly proactive attitude to telecommunications, aimed at turning Hong Kong into a major regional technology hub.Macau, also a Special Administrative Region (SAR) of China, has remained very low profile compared with Hong Kong in the development of its telecommunications market. Macau has systematically gone about building itself a strong modern telecommunications infrastructure and can now claim a highly penetrated telecom market. Fixed lines reached a saturation point at 40% teledensity a few years ago. Now attention is focused on the mobile market, where by early 2005 there were nearly 460,000 mobile subscribers, representing a penetration of 94%. Macau has also been a busy adopter of Internet in its various forms with strong encouragement from the administration. More recently, broadband Internet access, using Asymmetrical Digital Subscriber Line (ADSL), has been developing quickly and by March 2005 over 60% of all Internet subscriptions in Macau were broadband based.Taiwan - With its strong focus on the role of technology in its economy, it is not surprising that Taiwan has one of the most advanced telecommunications networks in Asia. Most high profile in this regard has been the remarkably booming mobile sector. Having moved past 100% subscriber penetration in early 2002, the mobile market peaked at around 116% in 2003. Then followed a year of market rationalisation and by early 2005 mobile subscriber numbers had dropped back to 21.3 million or a penetration of 94%.The Taiwan telecom market seems to simply find new ways to grow, however, and the country has been energetically moving into the next generation of mobile services. Following the awarding of 5 licences for Third Generation (3G) services in 2002, one of the new licensees, APBW, launched its cdma2000 1xRTT service in mid-2003. The new operator claimed 550,000 subscribers by early 2005, having expanded at an annual rate of almost 200% in 2004. The other operators granted 3G licences had announced plans to launch new services in 2005.The broadband market in Taiwan is also one of the more heavily penetrated in the world. With around 90% of households having some form of Internet access, about 55% of these have access to the Internet provided by some form of broadband. With DSL as the dominant platform the broadband market was still expanding at an annual rate of 15% coming into 2005.The role of the government in creating a liberalised telecom market in Taiwan should not be underestimated. First there was the strong push for competition to incumbent Chunghwa Telecom and to generally make the market more accessible to new operators. More recently the focus has been on achieving the privatisation of the incumbent and, although there were a number of political issues yet to be resolved before the proposed sale of a further 17% stake, this looked like happening in 2005. |