3HK Interview: How cut-throat competition made product/service diversification essential

Hong Kong lays claim one of the highest rates of mobile and internet penetration in the world, and competition among its various service providers is getting fierce. Other than focusing on better customer segmentation, collaborations with other industries could be a way to stand out. Marketing's Simon Yuen talked to 3 Hong Kong's (3HK) management about the company's marketing strategies and future development.

According to the Office of the Communications Authority, as of September 2018, Hong Kong boasts more than 19 million mobile subscribers, meaning the city’s mobile subscriber penetration rate has reached an incredible 256.7%. That's an average of 2.5 mobile phones per person.

With that level of saturation, cut-throat competition is forcing telecommunications service providers to refine their offerings and services. 3HK is choosing to focus on enhancing its own products, pricing, and promotions, to capture the hearts of customers.

"Our products are not just about data roaming and telecommunications services,” says Kenny Koo, executive director and CEO of Hutchison Telecommunications Hong Kong. “We strengthen our portfolio with FinTech partners, insurance companies, and the health and beauty industry, aiming to diversify the scope of our work.”

The telecommunications company’s most recent move was the revamp of 3Supreme to expand the brand's relationship with high-spending customers beyond the usual data packages and handsets. In addition to two new tariff plans, a select number of customers can enjoy the lavish privilege of a concierge service, which includes ticket sourcing for concerts, performances, sports events, and exhibitions. The tariff plan also goes as far as to offer travel itinerary planning and travel emergency assistance services, as well as opportunities for customers to attend premium lifestyle events.

“We have developed a segmentation strategy and competitive pricing to target various groups, and premium services are one of the sources to enhance our income,” said Koo.

3HK has also launched its Getaway Travel Service, which offers travel data and unlimited talk time for both incoming and outgoing calls to Hong Kong.

“We aim to provide a localised local mobile experience while eliminating traditionally-expensive roaming charges to frequent travellers. They don’t have to rely on another SIM card or a portable WiFi to travel aboard,” he explains.

In September 2018, 3HK collaborated with the online lending platform WeLend which enabled 3HK customers to get a new phone and at the same time receive a cash loan of up to double the total contract value. Powered by the strong customer base of 3HK and WeLend’s advancement of FinTech, Koo said this collaboration was an attempt to tap into the market of microloans.

While the prospect of 5G being in widespread use is still a reality further down the pipeline for Hong Kongers, 3HK has been testing and trialling the network since 2017. Last November, the telecommunications company completed a 5G outdoor network trial in the 3.5-GHz and 28-GHz spectrum bands ahead of the commercial availability of the tech. 3HK believes that it was the first Hong Kong mobile operator to complete a live outdoor 5G trial broadcast.

Koo said the company has been working with different operators before an official launch, and that more details will be unveiled in the near future. However, the development of 5G has closely circled the issue of cybersecurity, with Chinese telecommunications equipment and consumer electronics manufacturer Huawei being thrown into a questionable spotlight. The potential for data leaks has worried governments and members of the public alike in several countries, with some regions outright restricting 5G development by the company.

But on the subject of data concerns, Koo said the company has tried its utmost to protect customer privacy and stated that a dedicated team has been established to monitor and handle data.

“Huawei is one of the leading providers of telecommunications equipment in Hong Kong. We consider both cost and security while developing new products and collaborations with other parties. A company we have worked with before doesn’t mean that it will easily get our contract, we treat all contractors fairly,” Koo concludes.