ITU 2006 - "Delighting the customer - The role of PCCW as a Quadruple Play Operator"

6 December 2006, ITU 2006, Hong Kong

For those of you here today who have worked at the heart of the almost-miraculous communications revolution of the past three decades, there can be no challenging the claim that this has been the most creative and exhilarating sector in which anyone could dream of working. It has attracted the most creative and innovative scientific and technological minds - many of them here at the ITU this week.

But visionaries have their shortcomings along with their strengths. Their simple fascination with the technology they are developing often leads them to want to develop products and services more because they can be developed, than because significant numbers of consumers want or need them.

There are a number of reasons for this, and some of them are very close to my heart, and that of PCCW. One key reason is that in our passion and excitement for the next new idea - whether it is YouTube, Skype, myspace or Google or any number of other fascinating, inspired business ideas being spawned almost by the day - the companies that provide critical infrastructure have fallen quickly out of fashion. In their efforts to accommodate these thrilling innovations, regulators who are often struggling to keep abreast of communications innovations, and the implications they have for the sector, have frequently introduced regulations and reforms that may boost the prospects for a bright new idea, but at the same time undermine the longer-established players that provide the critical infrastructure that would deliver these new ideas reliably to a potentially-delighted customer.

It's a bit like being so preoccupied with encouraging new low cost and charter airlines that those airlines providing reliable and comprehensive scheduled services get undermined, to the detriment of the entire aviation sector: travelers get cheap flights to a handful of popular destinations, but at the expense of reliable and frequent access to a broad range of important but less popular destinations. Reforms aimed at enhancing choice end up reducing it.

The policy on electric power supplies is another example. We saw power outages in major cities, ridiculous in this modern day and age.

In our telecoms sector, this unfettered fascination with the new has had consequences that we at PCCW think may be to the long term detriment of our industry - and of our ability consistently to delight our customers. As a "quadruple play operator" -- and the largest IPTV provider in the world -- that is weaving together fixed line, broadband, IPTV and 2 and 3G mobile services on a platform that is absolutely reliable for our customers, we find industry structures being created that are cutting the incentive to provide or maintain the reliability of the infrastructure. In a mistaken anxiety to pave the way for the next new idea, the infrastructure that would deliver that next new idea reliably and as a delightful consumer experience is being discriminated against. As a result necessary investment often does not take place.

I agree with Steve Berkovitz, head of Microsoft's online services business, who was quoted last week as saying that newly emerging specialized sites in due course will have to have search, have to have community, and have to have content. The fact is that narrowly-based providers may have excited us with their brilliant new concepts, but if they are to provide delight on a sustained basis to customers into the future, they will need to develop as broad-based portals.

At PCCW, as a quadruple play operator, we are striving to do just this: to provide a sound technology platform on which other services can be reliably based - to build not just an excellent road infrastructure, but to provide excellent vehicles to travel on it. I don't think it unreasonable therefore to be concerned when new regulations on the one hand require us to provide superhighways via our fixed line network for common use, but then eliminate any incentives to make sure the superhighways are built and maintained at levels that ensure they meet the sector's needs. Let me simply say that a better balance needs to be struck - or our ability to continue delighting our customers, whether here in Hong Kong or countries across the world, will be compromised.

And this better balance also means ensuring choice. I would like to use another industry's past as a comparison. Massive investment in the US a century ago in a superb road infrastructure paved the way for a highly efficient car-based economy. The failure to invest similarly in urban commuter rail systems left Americans with only one choice: buy a car. In Japan at around the same time, huge investment in high-speed rail left the population with a rail infrastructure second to none, but a second-class road network. Development of a single infrastructure platform has brought benefits - but at the expense of choice, which has left each community with serious infrastructure challenges going forward. In telecoms, we need to try to avoid similar impingements on choice - which again points to a need to provide incentives for strong investment in infrastructures, plural.

I think we need to work together as an industry with our regulators to ensure that appropriate solutions are found. With the many brilliant minds gathered here at the ITU in Hong Kong this week, I have no doubt we have the brainpower to find them, and I can assure you that we at PCCW will play a positive role in every way we can. We have always felt empowered by our "Hong Kongness" - which is all about energy, opportunity, enterprise, innovation and quality. I hope you feel it too while you are here in Hong Kong, and of course hope you take lots of those away with you: our sector will be all the more energized for it. Thank you!