New wave of networking: Can Hong Kong rise with the tide?

Kenji Hioki, Asia Chief Commercial Officer and Regional Executive, ColtWith the swearing-in of Carrie Lam's new administration on 1 July, all signs seem to point to a continuation of the Hong Kong government's policy of encouraging innovation and the growth of the city's technology industry. Yet the continued focus on top-down planning, such as dedicated technology and science parks, as well as segmented financial incentives, including separate schemes for small and large enterprises suggests that policy-making hasn't yet caught up with forward-looking trends: tomorrow's future leaders should not be rigidly defined as "SMEs" or "large enterprises". The lesson of the current tech revolution is that a company of any size can be the next global disruptor.

In the age of the cloud, physical assets have become less important; instead, in today's information intensive economy, bandwidth is the most critical requirement, which is contingent on high-quality, constant and reliable infrastructure. A look at the changing face of Hong Kong's enterprise connectivity landscape suggests that the market, at the very least, is starting to recognize this.

A less famous anniversary

"The lesson of the current tech revolution is that a company of any size can be the next global disruptor"
-- Kenji Hioki, Asia Chief Commercial Officer and Regional Executive, Colt

On 1 July, Hong Kong marked 20 years since the establishment of the HKSAR and its return to China. What was less well recognized was the fact that it was also the 20th anniversary of when the Information Infrastructure Advisory Committee (IIAC) was formed to guide the development of the new self-administrating territory's IT infrastructure. The initiative was a huge success at the time, with numerous operators investing millions in Hong Kong's broadband infrastructure, establishing the city as a leader in applications such as video-on-demand (VOD) services and intelligence service platforms, both of which were game-changers at the time.

These investments in bandwidth were sufficient to support Hong Kong's economic development for many years, but new challenges have arisen in the face of today's game-changers: big data, artificial intelligence (AI), the internet of things (IoT) and the cloud. These global applications have forced a huge shift in terms of bandwidth, reliability, security and latency requirements -- to such an extent that most of the world's competitive tech enterprises, such as Facebook, Uber, Airbnb and Netflix do not own their own connectivity infrastructure and related assets and are completely dependent on the cloud.

Global mindsets will succeed

Over the last year, many of the domestic telecom giants of the Hong Kong market have been gradually divesting or selling-down their networks, while providers with a more globalized footprint have ramped up their local investments. The reason for this is simple: the shape of demand is changing. Applications such as big data and IoT are expensive to run and Hong Kong firms now want financial and operational flexibility to scale up and scale down as they enter new international markets and introduce new services while seeking to profit from the next wave of innovation.