What's Smartone's HomePhone+?

SmarTone-Vodafone stirs the market with fixed-line package

SmarTone-Vodafone's promotion of its new fixed-line service heralds a shake-up in the mature Hong Kong telecommunications market.

The mobile business arm of Sun Hung Kai Properties last week introduced its Home Phone Plus plan for residential fixed-line users, offering a flat voice plan with value-added services including voice over internet protocol access for HK$118 a month.

A dedicated phone set would be provided for free if users committed to an 18-month contract, the company announced last week.

PCCW dominates the fixed-line segment with a market share of almost 70 per cent, serving more than one million homes. The balance is shared by Hutchison Telecom, Wharf T&T, Hong Kong Broadband Network and New World Telecom.

Residential fixed-line service penetration reached 95 per cent at the end of February, data from the Office of the Telecommunications Authority shows.

"Over 60 per cent of local families said that a phone is still a must at home," SmarTone chief executive Douglas Li said, citing a survey conducted by his company. "This is a family-shared phone and represents the location of the family. It is not affected by mobile substitution."

Mr Li said there was still plenty of room to lure users from competitors.

As a mobile operator, SmarTone-Vodafone can make use of the coverage provided by the 2G mobile network to deliver the service. The dedicated phone set is connected to the GSM mobile network, so that once a user switches on, an over-the-air network setting can be applied to fix the phone network signal at a customer's home. The network signal could be reset when a customer changed address, Mr Li said.

"We deploy a new auto network zoning technology with our new home phone service," he said. "This is a self-developed technology that helps guarantee the network coverage of the home phone."

However, an executive at a rival operator said SmarTone-Vodafone's mobile network might not perform well in some residential high-rises, and signals might be poor in some harbour locations.

SmarTone-Vodafone's tariff is set at a premium compared with plans of as low as HK$30 per month at some operators.

Mr Li said the company would compete on the quality of its offerings, rather than on price.

For calls using the internet, users can register their own internet phone account, such as that offered by Skype, on the Home Phone Plus account. Such calls can go through the home phone.

Meanwhile, PCCW is promoting its fixed-line product as a home multimedia hub. Its newly launched Eye service enables users to watch television programmes, learn languages and place bets on Mark Six through a broadband phone.

"Multimedia content is about personal preferences. With multimedia services, I believe the 3G mobile phone is much more suitable," Mr Li said

SCMP. Apr 1, 2008.