In the Spotlight: Niq Lai, City Telecom

Hong Kong-based City Telecom was the first carrier in the world to use Cisco's Metro Ethernet fiber platform as a way to reach the mass market with triple-play services. The result is a service provider with significantly less capital and operating expenses than the typical carrier. In fact, the company was able to build a network covering 1.2 million households for a mere $167 million. Niq Lai, City Telecom's director of corporate development, recently spoke with Telephony's Vince Vittore.

On the company's development as a triple-play provider: It's partly history and partly lucky timing. We started life as an LMDS operator, but that didn't really go very far. In 1999, the market was liberalized and we first started building a coax network. Then we found out there were limitations in the amount of bandwidth. After about 50,000 homes, we scrapped it. What we realized was that the density in Hong Kong meant we could treat the residential segment like the enterprise.

On the architecture: We've taken a corporate architecture and adapted it to the mass market. We cover 50% of Hong Kong by connecting 3100 buildings. There are roughly 400 apartments per building. That's how we've managed to keep the cost down-- we have a lot of centralized cost. In the fiber conversion, for example, you only need one per building. Instead of having IADs in the home, we have racks of them with 48 ports. Everything we do is centralized in that it's at the building. Video is the exception: We need a set-top that does the conversion.

On pricing services: We don't proactively bundle in part because $35 is quite a lot of money for our audience. We have a standalone pay TV service that doesn't have to go through DSL. We charge the equivalent of $16 for close to 40 channels. We tend to sell one service very aggressively and use that as our Trojan horse. We also do international direct dial, which is very important in our market.

On expanding into unlicensed wireless: I don't believe Wi-Fi in Hong Kong is taking off. We see WiMAX as being very disruptive to the industry because it complete decimates roaming. We think of wireless IP as an extension to our network.