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Summary:

Hong Kong Broadband Network, a company I have covered numerous times in the past, is perfectly comfortable selling a lot of bandwidth cheaply and embracing all sorts of over the top services running on top of their network and are okay selling big fat dumb pipes.

fiberbroadband

If Xavier Niel, founder and chief executive officer of Iliad, the broadband provider behind Free.fr, has mastered the art of cheap quad-play service, then the guys from Hong Kong Broadband Network (a company I have covered numerous times in the past) are just as  comfortable selling a lot of bandwidth cheaply and embracing all sorts of over-the-top services running on top of it.

The company that sells a 1 Gbps connection for $20 a month is happy admitting to the world that they are selling a “big dumb fat pipe”. I don’t expect AT&T or Verizon or British Telecom are doing that. After all, their copper/fiber is special, handcrafted in factories high up in Italian mountains. The Hong Kong service provider, however, has a different take:

[At] Hong Kong Broadband Network, a wholly owned subsidiary of City Telecom, we are proud to be a Big Fat Dumb Pipe provider, easily handling average bandwidth consumption of over 100GB/month per user across our 600,000 plus FTTH/B customer base.

At HKBN, we embrace Over-The-Top (OTT) content providers who help fill up our excessively Big Fat Dumb Pipes. We happily co-exist with OTT providers, as together we create value for our customers. Our superior bandwidth capability is the LUCA (Legal Unfair Competitive Advantage) that drives our industry leading 17.5% return on equity1,” said Mr. Lo Sui Lun, Chief Technology Officer of HKBN. (HKBN Press Release, PDF.)

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  1. Rurik Bradbury Monday, February 20, 2012

    Thanks goodness that ATT/Verizon and co have oligopolies and great lobbyists, to make sure that US consumers never have to put up with 1 GB pipes for $20.

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  2. Is it fair to compare Hong Kong broadband with the average U.S. city? Sure SF has a population density that rivals HK, as does NYC …but we have far more cities like San Diego with a population density 95% lower than HK where pulling FTTH is pretty pricey. Fortunately wireless solutions are on the way from new network firms….but $20/Gbps is going to be awhile.

    What’s the SLA on this $20/month Gbps

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  3. Just because one Telco has decided to sell their network as fat dumb pipes, does not mean others have to follow suit. The business reasons HKBN wants to be a dumb pipe provider could range from the fact that the high density of urban dwellers in Hong Kong reduces their capital needs to the fact that HKBN has no assets and skills to provide additional customer value.

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  4. There is a reason behind why American telcos don’t want to be just big dump fat pipes. They have been witness to a whole generation or two of online businesses rise up right before their eyes, using the infrastructure they built and become multi-billion dollar giants like Google. In their minds, they should have a much bigger share of the Internet revolution’s profits than they actually do now. Hence, you see the telcos and cable companies in the US do two things that are NOT about being big dumb fat pipes:

    1. They try to get into the content, service and application business for which they are ill-suited (at least compared to the other tech companies).

    2. They try to get in the way of the new technology companies offering more value and features and services to the general public, using their pipes and spectrum. In short, they get in the way of progress itself.

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  5. One big difference is Hong Kong is a relatively small place with a very high housing density. Not exactly an apples/apples compare here. What will Google charge for their service once it goes live in Kansas City?

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  6. The one main reason that asian companies are able to offer cheaper rates like these is they pay expired peanuts to their employees. If you work the maths of such a business, rent, commute, telecom etc costs pretty much the same. The only place Asia scores is poor wages. If we are generally OK with companies getting your businnes because they are cheap, because they pay barely subsistence wages etc, then I guess its cool. If you study the ecomonies of the BRIC countries, note the severe and fast increasing gap between the haves and have nots. A typical badband cable laying employee in india can never dream of sending his children to school.they have no social security, insurance, benefits et al, almost none to speak of. A typical security guard in India earns somewhere between USD 50 and 100 a month. Now, with cities like Mumbai, Hong Kong, New Delhi etc where rent is almost the same, if not more expensive than NYC or London, can you imagine the standard of living for these blue collar guys? But I guess as long as my big fat dumb pipe is cheap, why should I bother… I have to upload some more family holiday pics on social media…

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    1. I work for HKBN and i can tell you we dont get pay cheap at all. but i can tell you we can sell or internet for that cheap is hong kong housing are just so close to each other

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  7. It sounds too good to be true. This article doesn’t inform just beg questions. Like most broadband suppliers they hype up the connection speed. I wonder what the throughput is like at peak times when everyone is online downloading a movie. Whats the coverage, surely they just cherry pick the locations where FTTH is already installed. Maybe they’ve got gazillions of customers who are excited about a 1 gig connection, who knows, I can’t glean anything from this article.

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  8. Granting the points about differences in population density and low wages, the emphasis is not on low monthly subscription fee. The emphasis is not even on dumb, fat pipe. Instead the emphasis should be placed on that they are focused on offering service at the Network Layer.

    The argument that companies making billions on their access is spurious. Consider all the companies making money off of electricity. Or gasoline.

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