Q&A: Hong Kong CSL’s 'shocking' LTE customer experience discoveries

With all the talk about LTE, Connected Planet talked to Hong Kong CSL’s Chief Marketing Officer, Mark Liversidge, to see whether the real thing lives up to expectations.

Connected Planet: You were among the first telcos to launch LTE, can you give us a little background on the launch.

Mark Liversidge: Sure. We launched LTE in November 2010, the world’s first. We avoided putting LTE in a bubble to pilot it and instead integrated it with our HSPA+ network and rolled it out territory-wide from day one. We immediately offered HD voice – with noise cancellation and quality built in, and initially launched LTE [data service] with dongles.

Connected Planet: So what were the initial reactions from customers? I know that Hong Kong is hugely competitive as a marketplace, did LTE give you an edge?

Mark Liversidge: That is very true and so probably a great test lab for other telcos. The first thing we noticed was the impact on the corporate market. We designed it so that when we went from 3^rd generation dongles to 4^th generation dongles the device would stay on the 4G network. There was a great take up among corporates. Another area we noticed was in the home network, where a 4^th generation dongle can transform the fixed network environment and provide bandwidth for a host of devices in the home. I use this myself.

Connected Planet: So what’s next?

Mark Liversidge: We have some great things happening. We are first choice for Pocket WiFi [a personal ‘bubble’ of WiFi] and have found that is driving significant uptake. We have some exciting plans in the home router area too – managing multiple devices such as smartphones and tablets.

Connected Planet: What about pricing – have you trialed a few plans?

Mark Liversidge: Actually we have taken an inside out approach to this one and have priced aggressively – we have gone for the mass market straight out of the box. This has driven strong uptake.

We decided to break with conventional industry wisdom and aimed to give customers what they wanted!

Connected Planet: So, you didn’t go with promotional pricing?

Mark Liversidge: No, no discounting, which is also counter-intuitive in Hong Kong. The thing is LTE gives you greater spectrum, which gives you greater capacity. We now have massive spectrum. We see this as the death of the unlimited plan. With our pocket wifi we are already moving to volume based pricing and we have seen a 50% growth in sales – and without slashing prices. This is about value.

Connected Planet: So the move to volume based pricing is working?

Mark Liversidge: Definitely. As usage grows our customers realize the value in areas where they never considered there to be much of a choice before – in watching streaming content or in playing games. Plus we are very committed to getting multiple device plans right. Right now Hong Kongers have gone from 1.1 devices on average, to 2 so professionals will probably have a pocket wifi bubble plus a smartphone and a tablet. We now sell five SIM cards in a package – one primary SIM for voice and data and the other four for data only. People here change devices often so this allows us to manage this.

We have three targets as behavior changes. The first is enterprise mobility and we are seeing a actual redefinition of how businesses work. This even extends to M2M applications. The second is the small business market. In Hong Kong we have a lot of small businesses – with 10 – 20 people – and LTE suits them well. We are offering a ‘business in a box’ service on the back of this 4G connectivity. Last but not least, there is the consumer market, where we are focusing on lifestyle ‘bubbles’. So, we profile the ‘traveler’, the HK family, the ‘digital driver’ and offer plans that suit those profiles.

Connected Planet: What about caps and throttling and those methods to control usage. Do you need those?

Mark Liversidge: We do not throttle. We do have some capped plans but there are generous limits. What we are finding and exploring is that we are moving away from the buffet and towards an a la carte world. As customers begin to self select services they will become more sophisticated at it and select the best services for them. This does two things. First, caps become redundant because customers learn what they need and want. With customers in control they will get fair value. Second, it provides us with real time opportunities. Oh, and it allows us to break conventions, which is great.

Connected Planet: How do you address the third party content issue.

Mark Liversidge: We are busy partnering with a range of media, device and content partners. The thing is that Hong Kongers will not wait. There is a ‘nowism’ in Hong Kong that is everywhere. So, there is no point in spending money on HD for instance. If something is launched in Europe or the US on Monday it will be available here on Tuesday. So our approach is to extend connectivity and provide a gateway to partners so that LTE can deliver TV, for example. Wifi is too fragile for this.

Connected Planet: So, given that the capacity is there, what longer term trends do you see?

Mark Liversidge: I think it will be an exciting decade or two. It will be fascinating to see how today’s teenagers do business tomorrow, for example. I think conventional TV is pretty much a thing of the past. I think the ideas of cartridges and DVDs are on their way out and I think that the cloud will become pervasive – as long as we can provide capacity and stability.

Connected Planet: What one lesson have you learned that has lead to this success?

Mark Liversidge: Education. If you want to move to volume-based pricing, educate your customers. We have a campaign called ‘Why Pay More?’ it educates customers about a range of things that will help them get the best value. Essentially our message is ‘if you use 5 meg a month, why pay more?’ I cannot emphasize the need to educate enough.

Connected Planet: Thank you, Mark, that was an excellent insight into the real potential of LTE. Any final thoughts?

Mark Liversidge: Hmmm. One maybe. You remember those futurologists about a decade ago describing a rich, connected, digital life?

Connected Planet: I do indeed.

Mark Liversidge: Well, LTE makes those predictions come true, a decade late maybe, but true nevertheless.