"4G is about people to people. 5G is about machine to machine. The speed is so fast that it is more than enough for humans. Latency is critical."
HGC Global Communications does not expect significant closures of local enterprises despite the current challenges, instead some corporate clients have asked if HGC could help them expand to overseas markets, says chief executive Andrew Kwok Wing-pong.
The international fixed-line telecom operator plus information and communications technology, ICT, solution provider has been offering services to hundreds of corporate customers across five continents through its 22 overseas offices.
In addition to customers in Hong Kong and mainland China, HGC also serves markets in Southeast Asia, the United States, Europe, the Middle East, and Africa.
Customers include some of the biggest banks as well as the Hong Kong government, and Kwok expects businesses from virtual banks too.
Amid the trade war and the local social unrest, Kwok reckons some smaller companies are concerned.
But, he says many have asked HGC, which offers a range of services including telecoms, data center, ICT solutions, and broadband, to help them expand from Hong Kong.
"It is logical to diversify business. For instance, a company wants to open a consultancy in Cambodia, another wants to reset a manufacturing line in Vietnam for cost controls."
On the other hand, HGC has been helping some of the largest mainland internet companies to go overseas since 2005. If the customers want, Kwok says HGC can look for more new markets.
"With globalization, people travel around the world, they want to have the kind of service they use in China when they are overseas. If they are familiar with the service, they will follow you,'' Kwok says.
"A lot of internet companies want to come to Asia eyeing the vast population and the number of homes that have broadband,'' adds Kwok. He says they can be potential customers.
HGC owns and operates an extensive fiber-optic network, five cross-border telecom routes integrated into telecom operators in mainland China and connects with hundreds of international telcos.
American infrastructure-focused private equity firm I Squared Capital paid HK$14.5 billion to Hutchison Telecommunications Hong Kong (0215) for HGC in 2017.
Although the owner has changed, there is not much difference from before.
"When we see an investment opportunity, we will not hesitate. We won't reduce investment in local and cross-border infrastructure," Kwok says.
The group completed in August the acquisition of digital technology solution provider Macroview, which he says has been integrating well with HGC that provides the communications infrastructure.
Kwok adds that Marcroview, which has been helping corporate clients build up digital capabilities in Hong Kong, Macau, and mainland China, has recorded profit already.
"As our bottom line is positive, we are ready to inject more than US$10 million (HK$78.25 million) for any further acquisition or investment. But it will depend on the project, whether they can help our business expansion and have synergy with HGC."
With the acquisition of Macroview, Kwok says HGC is in a better position for competition.
"Smart automation is what most customers really want, especially large corporates, which need something bigger and more complicated. They want to have efficiency and cost saving.
"Our company has pledged to use less paper, I don't use paper during meetings. We put most of the things in the cloud."
While SMEs need more standard type of services, the company launched an online B2B ICT shopping platform, HGC Marketplace, that allows corporate customers to purchase cloud solutions including workplace applications, file sharing and management, cloud security, and so on anytime and anywhere.
It has also introduced the HGC Application Program Interface Hub, which aims to help customers connect and automate their operational process across applications and data sources in a cost-effective, secure, user-friendly and timely-manner.
HKBN (1310) acquired WTT this year, making it only second to HKT (6823) in both enterprise and residential markets in Hong Kong.
"It is common to see competition in an open market and a business world, if there's no competition then nothing can change. We have to be creative to fulfill customers' requirements."
Kwok says HGC is in a good position for 5G development, which will support a lot of internet of things solutions. "4G is about people to people. 5G is about machine to machine. The speed is so fast that it is more than enough for humans. Latency is critical."
However, it is much more than that. Kwok says, for instance, to allow an unmanned car on the streets, changes to various systems and regulations are necessary that will need the Transport Department and other government parties to discuss with other stakeholders.
"As we are the infrastructure provider, when further IoT comes, we will need to see what the speed that Hong Kong looks for.
"We need to partner with participants to maximize the benefits of 5G, which will bring another kind of lifestyle. The pie will be bigger and everybody will win," says Kwok, adding HGC is exploring network expansion.
"Optic fiber is important for the smart city development so that stable and predictable transmission can be achieved. Smart city, smart office, smart living, or smart X, they all need infrastructure and solution providers."
The article was first published by The Standard, 28 November, 2019.
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