Press Release



Keynote address by Acting SITB at II Expo Luncheon (English Only)


Following is the Keynote Address by the Acting Secretary for Information Technology and Broadcasting, Ms Eva Cheng, at the Information Infrastructure Expo 2000 Luncheon today (March 16):

"Building Hong Kong's e-infrastructure"

Mr Sze, ladies and gentlemen,

I am delighted to have the opportunity to address such a distinguished audience today. That you have chosen to come to this event shows that you must be a "techno-alert", if not "techno-savvy" member of our community. You have made an excellent choice. The Information Infrastructure Expo and Conference is one of the most important events of this kind in the Region. This year, we have more than 150 local and overseas IT and telecommunications companies and organisations joining the II Expo 2000. And we expect that the number of visitors to reach 100 000.

Since we launched the "Digital 21" IT strategy in November 1998, Hong Kong has been making remarkable progress in preparing ourselves for the information age on all fronts, particularly in the building up of what we call our e-infrastructure, including our high capacity communications systems and the common software interface for secure electronic transactions. I would like to share with you today the progress we have made in these areas.

First, Hong Kong is well served by an excellent telecommunications infrastructure. Our local broadband telecommunications network, entirely private sector driven, virtually covers all commercial buildings and over 80% of households. We have a lethally competitive mobile telecommunications markets providing quality service to 54% of the population. One overseas visitor I recently received coined our mobile phone packages "the best deal on the planet". The local fixed telecommunications market is fully liberalised with a total of ten providers, including four wire-line based fixed telecommunication network services (FTNS) licensees, five new licensees based on wireless technology, and the Hong Kong Cable TV which uses its cable network to provide telecommunications services.

Hong Kong is also well connected externally to the rest of the world. Since 1 January 1999, our external telecommunications services market has been fully liberalised. We now have 148 licensees which provide IDD services, and licences are issued freely on demand. Competition is fierce in this market and consumers have enjoyed substantial reduction in IDD prices since liberalisation. We estimate that consumers saved about HK$2.5 billion in IDD expenditure for 1999 alone. Our external connectivity will achieve a step-jump with the liberalisation of external telecommunications facilities market from 1 January 2000. In the past two months, we have issued licences to 12 external satellite-based operators and letters of intent to 13 successful applicants for external cable-based licences. These new operators are expected to increase our external connectivity by about ten-fold in the next three years. Total investment brought about by these new external facilities is estimated to be in the region of HK$10 billion.

Looking ahead, competition over speed, quality and price will be extended to a new frontier. We are actively preparing ourselves for the introduction of the third generation mobile phone services (i.e. 3G), which is expected to bring tremendous business opportunities for our telecommunications and IT sectors. In essence, 3G service provides multi-media communication on the move. The picture phone and fast Internet function will finally allow mummy to trace their teenage kids and actually see what they are up to, on-screen. By the way, the same function is called mobile video-conferencing to normal executives. After work, you can locate the nearest roadside carpark, book a restaurant table, buy cinema tickets (after watching the preview on the phone screen, of course) using your mobile phone. In short, it is a phone, notebook, bank, computer, what have you, all-in-one. We are going to issue shortly a consultation paper on the technical and licensing aspects of the 3G mobile phone services. Our plan is to invite licence applications around the end of this year. 3G service is expected to be available in the market in 2001.

The second component in our e-infrastructure relates to neither the electronic hardware nor software. In order to be successful in developing e-commerce in Hong Kong, in addition to the necessary telecommunications capacity and connectivity, a sound legal framework must be in place to protect the interests of investors and users. To this end, we have enacted the Electronic Transactions Ordinance earlier this year to provide the legal environment for Hong Kong to fully capture the growth and benefits of e-commerce.

The objective of the Ordinance is two-fold: first, to establish a clear legal framework to give electronic records and digital signatures the same legal status as that of their paper-based counterparts; and secondly, to establish a suitable framework for the operation of certification authorities so as to ensure trust and security in the conduct of electronic transactions.

We note that people have yet to take up electronic commerce over the Internet as enthusiastically as they have taken up browsing because of the concern over security of electronic transactions. With the issue of digital certificates by certification authorities and through the use of digital signatures and public/private key encryption, individuals and companies in Hong Kong will be able to establish the identity of the opposite party in electronic transactions, authenticate electronic messages received, ensure the confidentiality of electronic messages exchanged and safeguard against the retraction of commitments made in electronic transactions.

I have described progress in the area of development of our telecommunications network and a sound legal environment. Let me turn to the third component. It is our firm belief that the Government must complement the private sector's efforts in going on-line. As one of the largest service providers in Hong Kong, we must adapt to the digital world so as to provide better, quicker and cheaper services to the public. To this end, we will launch the Electronic Service Delivery (ESD) scheme this October. It aims to provide public services to the community electronically, through an information infrastructure with an open and common interface accessible throughout the territory. This will enable us to improve the quality, efficiency and accessibility in the delivery of public services. In the longer run, ESD will also help reduce the cost of providing public services.

When we launch the first phase of the ESD scheme in October this year private operators can also choose to use the common information infrastructure to provide business services to the private sector, thereby facilitating and promoting the development of e-commerce.

The Government, as always, cannot and will not outpace the private sector. In developing our telecommunications platform, our legal framework and Government's own on-line services, the aim is to provide a conducive environment for the industry to flourish. I believe Hong Kong offers excellent conditions for entrepreneurs, engineers and content creation experts to explore lands-end in the wonder world of ones and zeros.

Finally, the basics. What of market opportunities? The number of Internet users in Hong Kong has now exceeded 2 million. According to an industry estimate, the total value of products and services transacted over the Internet in Hong Kong will increase from US$60 million in 1998 to US$2.4 billion in 2003. Yet, this figure is only showing a small fraction of the entire picture of e-commerce potential in the greater China region. No one is agreeing on a figure on the massive business opportunities to be brought about by China's entry into the World Trade Organisation, except agreeing that the figure must be huge. And much of that could be transacted via the electronic environment. One industry estimate suggest that the value of e-commerce in China would grow from US$8.1 million in 1998 to US$3.8 billion by 2003. As Hong Kong develops into the telecommunications and Internet hub of the region, we stand to benefit from these opportunities as parties to these transactions, or providing services and support to such activities.

Ladies and gentlemen, it is always a challenge to speak after lunch is served. And it is a challenge nowadays to talk about IT and telecommunications not wearing khaki pants, open-neck shirts and sitting on a high chair. May I wish you a very fruitful exchange of views and successful promotion of your new ideas at the II Expo 2000.

Thank you.

END/Thursday, March 16, 2000 NNNN