NEW YORK-Any wireless carrier that frets about competition on its turf should consider SmarTone Telecommunications Holdings Ltd., the fourth licensee in Hong Kong.
The city-state has a population of 6.9 million, of whom 4 million already are mobile customers. Serving this market are six mobile telephony companies and 29 paging providers.
In a crowded field, Ian Stone, chief executive officer of SmarTone, is pursuing a Jack-be-nimble, Jack-be-quick strategy.
Launched as the first GSM cellular carrier in Asia in 1994, SmarTone acquired a PCS license in 1998 and today offers dual-band as a service option. Furthermore, it does not plan to stop at mobile wireless or at Hong Kong’s borders.
Of its 830,000-plus mobile customers, about 150,000 are prepaid. Late last year, SmarTone became the first carrier in the world to offer a roaming prepaid subscriber identity module card, an offer HongKong Telecom will also introduce soon, Stone said.
“One of the competitive aspects around SIM cards is they encourage people to swap the SIM card, not the phone, and that enables us to control handset subsidies,” he said.
Also last fall, the carrier introduced Wireless Application Protocol services, but suffered from a shortage of WAP-enabled handsets from L.M. Ericsson at the time. Nokia, Motorola Inc. and Siemens now are also providing these devices, and supply has improved over the past several months.
“WAP for circuit-switched (data) is not the answer. And there has been a lot of hype about short message service, but SMS has been disappointing,” Stone said.
“The real revenue growth will come from packet data, GPRS. The real evolution is from circuit switched to packet, and 3G will just increase capacity.”
SmarTone’s General Packet Radio Service network is fully deployed, and testing of the related software commenced in late spring. The company anticipates data rates of 30 kilobits to 40 kilobits per second early on, with a maximum of 56 kpbs, Stone said.
By fall, SmarTone aims for a limited commercial launch of GPRS using phones from Ericsson, Sanyo Electric Co. Ltd. and Mitsubishi. The company expects to obtain handsets in volume by the end of the year or early next, at which time it will ramp up its commercial deployment.
Stone has an even taller order for equipment manufacturers, “a handheld device that combines WAP, Java, MeXe, GPRS, packet, IP, GPS, Bluetooth, smart cards, etc.”
This is not just for the sake of making them jump through hoops. The chief executive sees such multifunctional devices as enablers of a key business opportunity in the transition from “always on and anywhere to between anything and everything.”
That explosion in machine-to-machine and home-to-mobile communications “will be the catalyst for convergence,” he added.
The third quarter of this year will be a busy one for SmarTone for other reasons, as well. By then, federal regulatory agencies are expected to have put the finishing touches on a framework for third-generation radio-frequency license application requirements.
“There is a heated debate over auction vs. a merit-based system, and one of the leading operators has come out for auction. We are well positioned for 3G and prepared for an auction. We’re not afraid of an auction, but it will play to bigger players, with 3G as the final catalyst for consolidation,” Stone said.
“There will be four to six licenses and probably a newcomer. Our viewpoint is there should be no preference for a newcomer. And there may be a merit-based auction open to a virtual network operator.”
Meanwhile, SmarTone is rolling out this summer its new local multipoint distribution system service. This is positioned as Internet access and content provision targeted at residential and small and medium-size business customers.
By the end of July, the carrier expects to have in service 11 of the 28 total hubs it plans and 175 of the 600 buildings it has targeted for this year.
“We are well ahead of schedule with LMDS … There are a lot of convergent aspects between fixed, LMDS/broadband, and mobile, 3G, GPRS and WAP,” Stone said.
Beyond Hong Kong, SmarTone seeks to leverage its wireless portal capabilities into China and Taiwan. This summer, it will joint venture with British Telecom, its 20-percent owner, “to take our global mobile Internet platform into China.”
