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GidaByte and ComNews Group Special Hong Kong Telecom Market Coverage: Interview with Mr. John Chiu, Chairman of the Hong Kong Wireless Technology Industry Association (WTIA) [25.01.07]

Andrey Gidaspov: Mr. Chiu, could you please tell us what were the main reasons behind the creation of the HK Wireless Technology Industry Association? Who first voiced that idea? How did it develop?

John Chiu:  Six years ago, my industry colleagues and I gathered together to discuss an idea of creating a wireless technology industry association.  We based our conclusion on the fact that the HK wireless technology market potential was rapidly growing.  And to successfully compete and function on this market, we needed to combine our efforts. 

Yes, there were not that many of us at that time, about 30 companies, which included content providers, wireless application developers and software companies.  But we saw the market potential, and even then it was quite significant.   I understood that the HK mobile development business is in fact, a quintessence of the local mobile industry. 

And we immediately applied to the HK government with the request for support of this emerging mobile niche.  As a matter of fact, we needed to have constant coordination of efforts from all participants and market players to achieve the market goals, to create this mobile eco-system.  And operators, and vendors and application developers, all of them needed coordination.  Understanding the importance of this task, the HK government approved this idea.  That’s how HKWTIA was created. 

The second development factor has been understanding that with the growth and rapid evolution of wireless technologies, we had to localize international standards of technology development on the local market.  We needed to explain to market players how these technologies are functioning.  For example, in the very first days of our operation, all six HK mobile operators joined HKWTIA. 

AG: What are the sources of HKWTIA financing?

JC: Our main revenues come from membership and sponsor fees.

There are only three staff members in HKWTIA: the Chairman plus two more people. 

AG:  What do you think about the 3G technology take-up in HK? What are the main challenges you can think of?

JC: As you know, four 3G licenses were issued to 3, CSL, SmarTone and Sunday in 2001.  These HK mobile operators were able to taste the benefits of new technology first.

And 3G development has been gradual, and overall successful.  As you are aware, by the moment of 3G license issuance, the HK mobile penetration reached 120% – so that means some 8 million SIM-cards were in use. 

At the same time, 2G and 2.5G technologies fully fitted the moment.  Their potential, I can say, still hasn’t been fully exhausted. Therefore, many market players had doubts about the new technology.  Why do we need to transfer to 3G, when there was significant potential for the earlier standard?

However, I think that 3G has finally won.  Despite the fact that it is hard to name that “killer-application”, and operators have not yet defined who is that sector’s cash cow, we can confidently say that subscribers realized that 3G is the future. 

Here I wanted to emphasize the importance of an effective 3G promotional campaign, that played a crucial role in popularization of the service.  The HK government provided financing and mobile operators also invested into the creation of a unique 3G Corner project.  We announced a tender for the best 3G application among local wireless application developers.

This was a very successful event – from that tender we chose some 15 best applications.  These 3G applications were very impressive, and they fueled the interest of the mass subscriber.  A whole new precedent was created.  Local wireless application developers realized that government and industry will support them.  That was truly a revelation.

Moreover, the main purpose of HKWTIA is to make Hong Kong a regional hub for development of mobile technologies.  In addition, we offer to our members a range of practical seminars and trainings, invite leading companies and experts from EU and the US, China and South East Asia.  These events are usually fully booked, and have been very popular with the HK wireless development community. 

AG: What about mobile TV development in HK? And what is the situation with WiMax?

JC:  Several HK mobile operators began promotion of mobile TV services via the 3G network.  And its advantages are quite obvious – huge channel capacity, great LBS services and data transmission capabilities. 

As far as WiMax is concerned, I personally support the “Wi-Fi City Concept” initiative.  We think of this concept as a complex solution that converges all access technologies together for the benefit of the end-user.  In other words, it is not important how the “last mile” will be connected, as long as we know how the technologies in between are developing. 

In general, we do support WiMax, however, rather as supplementary solution in the format of 3G + WiMax.  I also want to mention that this technology has not yet matured, and there is also no good business model.  But the “Wi-Fi City” idea can unite people anytime, any place!

Does WiMax pose any threat to 3G? I don’t think so!  WiMax, in my view, is meant to simply support the economy of scale for ful utilization of frequency channel. 

AG:  Mr. Chiu, what lies behind the support of TD-SCDMA technology? How political is this technology and how real is it?

JC:  The HK government as well as Central Chinese Government shares the view that once 3G technology is launched in mainland China, HK companies will have myriads of opportunities.  Local companies have so much to offer to their peers in mainland China.  Similarly, the HK government does its best to support Da Tang, major Chinese TD-SCDMA vendor, and development of TD-SCDMA.

Look, you are now sitting in a unique place.  This is the only zone outside of mainland China covered by TD-SCDMA technology.  Here is an antenna, and the coverage zone includes parts of CyberPort. 

OFTA provided us with the license for testing this technology.  Therefore, this is actually a unique opportunity for local and international companies to integrate their technologies with TD-SCDMA. 

Regarding the political support of TD-SCDMA, I can tell you that China is interested in creating its own national standard.  And isn’t it logical? I think that China and Russia are quite similar in a way that we both have large territories, and unique specifics that can only be understood by us. 

It is difficult for outsiders to fully realize what is happening in country.  And therefore, TD-SCDMA was created specifically as the third generation technology which is able to offer excellent quality of service for 1.3 billion of subscribers, which is a huge market in itself.

You know that China is interested in creation and protection of its own intellectual property.  And a large variety of existing western technologies should not contain local developers.  Think of it as China’s national pride. Da Tang has already tested this technology in Shandong province, Beijing and other cities.  There more than 10 terminals available.  So the future of TD-SCDMA is very bright.

AG: Who are WTIA’s members? How can a Russian company join WTIA? Can WTIA help Russian mobile content providers and operators to gain access to the Chinese mobile market?

JC:  Now about WTIA membership.  Currently we have combined WTIA and HKWDC memberships.  We have 150 permanent members, market players.  Most of them, local wireless application developers and content providers, they comprise 40% of all members.  Operators, are obviously a minority. 

And you know, WTIA and HKWDC are in fact your bridge to mainland China.  I am happy to admit that we have established truly outstanding relationship with the China Ministry of Information Industries. 

And after all, we have the direct connection to all HK mobile operators. 

Therefore, I advise my distinguished colleagues in Russia – come to Hong Kong, open a local affiliate and join our Association!  And then you’ll see how easy your business here will be. 

We have had numerous success stories helping both local and international companies to find good partnerships in HK and mainland China.

AG: Now, my final and traditional question: what is your secret to success?

JC:  Success? You need to learn to find solutions to your questions on a human basis.  We are so overloaded with technologies, standards, etc.  However, the core key remains human relationship.  If you know how to build these relationships correctly – you will always win.