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SCIT on prospects and potential of telecommunications industry


Following is the speech by the Secretary for Commerce, Industry and Technology, Mr Henry Tang, at the Opening of the 8th Asian Telecommunications Industry Exchange Forum today (November 30) (English only):

Mr Hau, distinguished guests, ladies and gentlemen,

It is a pleasure for me to address the 8th Asian Telecommunications Industry Exchange Forum. The Forum has become an annual occasion for Asian economies to gather and exchange views on telecommunications issues of common interest. This is the second time we are hosting this forum since 1998, and I must thank the Hong Kong Internet and Telecom Association for bringing a distinguished group of industry leaders to our vibrant city again.

The telecommunications industry has its ups and downs. We probably have to admit that, currently, industry operators are trying their best to stay competitive amid the global crisis. Looming over the industry now are issues relating to overcapacity, need for a sound business model and corporate governance. But if we take a longer term view, the promises, prospects and potential of the telecommunications industry in an increasingly globalised world are just limitless.

With China's accession to the World Trade Organisation (WTO), one of the most important issues among telecommunications leaders in Asia is undoubtedly how to tap the business opportunities in this huge market.

Let us first take a look at the impressive developments that have taken place in the Mainland over the past five years. China's fixed line penetration has grown 3 times from 5% to 16%. For mobile usage, the penetration rate has risen from less than 1% to 15%, representing an increase of over 15 times. China is now the largest mobile market in the world with nearly 200 million subscribers.

The growth in internet popularity is just as startling - the number of internet subscribers in China has increased over 400 times from 100,000 people to 45 million. Despite the rapid growth, we are still talking about less than 4% of the total population in China.

The million dollar question on everyone's mind, however, is how are we going to take advantage of the tremendous business opportunities in front of us? My answer is simple: use Hong Kong as your anchor.

First, Hong Kong companies have an edge in providing total IT solutions to support the growing needs of Mainland businesses, especially in areas like logistics and supply chain management. With our ability to understand complicated business requirements, and the experience in managing major IT and telecommunications items under a competitive market, Hong Kong's IT and telecommunications industry is well placed to provide the much wanted one-stop total business solution.

Secondly, we have invested heavily in meeting the needs for high speed telecommunications. Our excellent connectivity, which stands at the second highest in Asia, makes us an attractive focal point for international traffic to and from China. Speed and capacity spin off value-added services like time and date stamp, disaster recovery, and data centre.

Thirdly, our leading position in mobile and internet services gives us the competitive advantage in developing innovative mobile applications and content for the Mainland. In its September report, the ITU ranks us number one in its mobile/internet index, recognizing our strengths in infrastructure, network usage and market structure. Our entrepreneurial and competitive mobile operators, and content and application providers, are well placed to offer wireless applications and services which appeal to consumers, especially customers in the Pearl Delta River Region with whom we share a similar dialect and popular culture. Those who lead in introducing cutting edge business mobile applications, like the one-stop corporate e-mail services, also stand a good chance of success by taking their innovation across the border.

In short, Hong Kong offers a unique combination of advantages when it comes to doing telecommunications business in China. We know the China market well. Our cultural affinity, language capability and over twenty years of experience of doing business in China give us the necessary know-how for venturing into this vast market. And we have a sound common law judicial and legal system, an international financial system with free flow of capital, and a clean and efficient government. It is a business environment that overseas companies are familiar with and can comfortably rely on.

Added to these strengths is our steadfast commitment to protecting intellectual property rights - a critical pre-requisite for any knowledged-based economy. This commitment is underpinned by our comprehensive IP legislation, which complies fully with the WTO TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights). Our vigorous enforcement actions, sustained public education efforts, as well as serious co-operation with intellectual property owners in combating piracy have won acclaim from many of our international partners.

Thanks to the organisers, the conference today has brought together industry leaders and professionals from different parts of Asia. I am sure you will have stimulating discussions on a wide range of crucial issues before the industry as well as on how to leverage the potential opportunities.

Finally, I would like to extend my sincere invitation to all of you, especially those from overseas to stay on for a couple more days to participate in the ITU TELECOM ASIA 2002. This will be an invaluable opportunity for industry players, policy makers and businessmen to meet and update themselves on the latest development in the telecommunications market. I am sure many of you have indeed planned your trip on this basis.

I wish this Conference every success and all the overseas delegates a very happy and fruitful stay in Hong Kong. Thank you.

End/Saturday, November 30, 2002


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