The fast and curious: Different approaches HK brands are taking to win the 5G race

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Speed
On 1 April 2020, after much anticipation, China Mobile Hong Kong, Hutchison Telecommunications Hong Kong Holdings, and HKT each launched 5G service schemes.

3HK – a brand owned by Hutchison Telecommunications Hong Kong Holdings (Hutchison) – was one of several telecom operators to launch its 5G services that day, hoping to cash in on a massive investment.

Back in May 2018, 3HK received its permit from the Communications Authority (CA) to conduct 5G network trials in the 26GHz and 28GHz bands. Six months after that, 3HK presented a live outdoor broadcast from Causeway Bay transmitted via a 5G network in the 3.5GHz band. As the hype grew, the company had made a successful bid of HK$202 million for 40MHz of spectrum in the 3.5GHz band at the CA auction.

Now, 3HK’s outdoor 5G coverage includes Wan Chai, Causeway Bay, Tsim Sha Tsui, Mong Kok, Sham Shui Po, Sha Tin, and Tai Po. Indoor coverage includes the Hong Kong Convention and Exhibition Centre, leading shopping malls, Hong Kong International Airport, and certain 3Shops. 3HK’s utilisation period for that 3.5GHz band will run for 15 years to the day it flipped the switch, ending only on 31 March 2035.

But even if time, tech, and territory is on its side, 3HK has already moved to the second phase of its plan.

Andrew Yau, vice-president of consumer marketing at Hutchison Telecommunications, tells Marketing: “We will expand the coverage of our 5G network to every district in Hong Kong in 2020. Also, we will set up a new task force to tap into new business opportunities in 5G corporate solutions. We aim to create different application scenarios for various sectors to speed up smart city development and the industry’s digital transformation.”

In a short amount of time, 3HK has already recruited thousands of 5G customers. And that was certainly helped by the brand’s actions in the second half of 2019, when it launched the Net+ service, allowing users to become network VIPs with top priority access to the 4.5G mobile network and free use of mobile data.

When April 2020 arrived, these early adopters of high-speed mobile services were then automatically upgraded to 5G services with an additional monthly data entitlement of 100GB at no extra charge when 3HK launched.

Giving customers their first taste before an upgrade is an old tactic, but it works. And every operator in Hong Kong is employing their own strategies and plays in what is expected to be a fiercely competitive race to achieve dominance.

As one of the first operators out of the gate, 3HK says its strengths lie in Hutchison’s global network. As part of the larger Hutchison corporate family, 3HK can also apply 5G services to other brands within the conglomerate and form fast and firm partnerships with its other brands, companies, and clients.

Yau explains: “We can offer a unique experience by drawing on CK Hutchison Group’s telecom operations in 12 markets globally. Leveraging our close ties with the 3Group, and collaborative efforts with global partners, 3HK enjoys the rich experience of cross-boundary network deployment and an edge on procurement with global device manufacturers.”

The brand does not have clear statistics about the proportion of individual and corporate customers. Yau says one clear enticement for either kind of customer will be the price.

“The average price of data is about HK$3.8 per GB, much lower than that of 4G. After using up the monthly data, customers can still use the 4.5G service which won’t greatly hamper the quality of service,” he says.

In the run up to, and the aftermath of Hong Kong entering the 5G era, telecom operators have launched campaigns to educate customers on the benefits. 3HK’s own “5G On Air” online series, launched in March, covered a range of topics, including augmented reality, virtual reality, mixed reality, gaming, education, entertainment, and business solutions, talking about everything related to 5G in a fun and simple manner. The company also offered a promotion, offering 10 5G smartphones with a discount of up to HK$1,500 for subscribing a new 5G SIM plan.

Patience
Another player on the 5G playing board is SmarTone. While the brand was part of the first batch of licensed 5G operators in Hong Kong, it didn’t rush to launch. Instead, it kicked off its 5G services on 26 May, nearly two months after the launches for HKT, CMHK, and Hutchison.

Josephine Lam, head of marketing and sales at SmarTone, explained the reasoning behind the pause saying: “Our plans to launch it (5G) in mid-2020 are on track. We have been testing and co-operating with the 5G ecosystem before entering the market.”

In the first phase following the launch, SmarTone expects that within a year its network will cover at least 80% of the population. Lam further explains to Marketing that SmarTone has strived to deliver a fast, stable and seamless service with extensive Hong Kong coverage at launch. In preparation, the company has spent the past few years conducting field trips to foreign countries with 5G services in order to obtain experience.

There are reasonable arguments for SmarTone’s caution. The overall support for 5G in Hong Kong is still fledgling, 5G-related applications are still lacking, and there are few actual 5G smartphones for consumers to choose from on the market.

Potential stability issues within the 5G network also pose a major concern among customers and SmarTone is conducting trials to ensure safety and stability. Lam states that in that department it has an ace in the hole.

“SmarTone is the only Hong Kong telecom provider using Ericsson’s infrastructure. We have been working together for more than 28 years.”

Under the partnership, SmarTone leverages Ericsson’s pioneering spectrum-sharing technology, which enables a higher network speed. AI real-time radio processing also assists in achieving a smoother experience with greater stability, and a European network security model offers greater cybersecurity for users.

As part of Sun Hung Kai Properties, SmarTone has also been conducting trials of its tech across the group’s real estate sites, including security checks at hotels and health and safety inspections at construction sites.

Building public awareness has also been a focus. So, in addition to the standard online ads, SmarTone has also been launching offline campaigns to provide first-hand experiences to potential customers, including several planned pop-up stores with different themes across Sun Hung Kai Properties’ shopping malls.

In January, SmarTone collaborated with Hong Kong-based start-up Formula Square to support a live demo and live broadcast aimed at showing how 5G could transform Hong Kong into a smart city. During the demonstration, the company showcased 5G applications in various sectors, including healthcare, construction, transportation, and even coffee brewing.

Looking ahead, SmarTone will also continue to offer first-hand experiences of the network from June onward at its 5G experience pods at apm in Kwun Tong, and IFC in Central.

Yet, while awareness is a good start, SmarTone has its own greater ambitions to entice consumers into becoming 5G early adopters. Earlier this year, SmarTone launched the Samsung 5G Galaxy Pass, giving customers who bought a Galaxy Note 10 series priority to reserve an upgrade to Hong Kong’s first Samsung 5G flagship smartphone. At its 5G launch, SmarTone also rolled out a limited-time offer for customers who purchased the latest Samsung Galaxy S20 series 5G smartphone with reduced monthly service fees for 5G.

One elephant that remains in the room is that the price of a 5G plan is almost certainly going to be more expensive than a 4G one. Asked how it intends to meet the needs of customers in different income brackets, Lam tells Marketing that SmarTone will adopt a customer segmentation pricing strategy, aimed at covering the needs of every sector. For example, the brand is considering launching different plans for families than those meant for young professionals.