Co-operate and diversify

15 November 2010 |


Andrew Kwok believes that a co-operative business model builds a stronger, more effective network. Angela Partington reports.

 

Having worked in telecoms for over 20 years, Andrew Kwok has a talent for perspective, with a long-term understanding of how the telecoms industry has flourished – and faltered – during that period. He started his life in telecoms at Cable & Wireless (HK), before moving on to hold various management positions at Hong Kong Telecom International and MCI International in Asia and Hong Kong, where Kwok was clearly working at the cutting-edge of development. “I had the honour to work with many senior professionals, including Vint Cerf, an American computer scientist who is now recognised as one of the fathers of the internet.”

No one can question Kwok’s experience in the region, either. He moved on to the role of vice president and managing director of Teleglobe (Asia), where he managed its operations in more than 20 countries in Asia. And in his current position as senior vice president, international business at Hutchison Global Communications (HGC), Kwok has played a pivotal role in establishing a strong foothold in Asia, north America and other regions such as EMEA, with 18 offices in Hong Kong and overseas.

Having witnessed developments in telecoms from a front row seat, Kwok refers to the early years (before the 1980s to 1995) as the “bilateral phase”, when carriers were driven to bilateral co-operation to build their networks and provide point-to-point services. However, from the mid-90s, he observed a lot of deregulation and a change in the dynamics of the market. “The customer is asking the operator to take full responsibility for the service, instead of satisfying it with a bilateral approach.” Kwok believes that this, along with deregulation, is why operators started to build end-to-end circuits and attempted to provide global networks, hoping to provide a total solution. Having made a major investment in private cable systems, Kwok notes that many companies were forced to put most of their traffic on these systems in order to secure a return on their investment.

The rampant investments in the expansion of private cables were unsustainable, of course, and the bubble burst in 2002. Kwok comments: “Too many people had relied on their perception and their forecasts for internet usage, and decided to make investments in capacity. Then, the internet was only a philosophy; now I think it’s a more solid revenue-generating business.” Many carriers went into Chapter 11 bankruptcy protection and there was a lot of subsequent consolidation; the ownership of several private cables was transferred from one business to another.

These events opened up space in the market, which Kwok exploited. “I joined HGC in 2002, responsible for the development of its international business. Throughout these years, we have developed the company into a voice data and internet hub in Asia.” Kwok initially focussed his efforts on HGC’s expansion in Asia, building business and capacity to all major countries with growing telecoms requirements such as Vietnam, Cambodia and Thailand and catering to the telecoms needs from Nepal, Kenya, India and Egypt. However, he is particularly proud of HGC’s dealings with China. HGC boasts “the most diverse cable links between Hong Kong and China, in terms of fibre connection or the total amount of capacity”.

Under Kwok, HGC’s method of undertaking such growth was far from traditional. Kwok placed a huge amount of faith in two principles: co-operation and diversification. “We did not want to follow the old bilateral model, or expand our capacity in a country and compete by ourselves. We are using a co-operational model, so our expansion phase is faster than other companies.” The model, he believes, offers a win-win situation to all parties, but he is realistic about its effects. “The parties involved contribute what they have already invested, and what they are good at – resources like network, manpower, talent. So both sides earn faster; but they also have to be prepared to earn a little bit less.”

Kwok also supports more formalised routes to co-operation. He speaks highly of the Wholesale Application Community (WAC), an international organisation representing developers and operators to support applications and application platforms. Kwok has also been appointed chairman of the Conexus Mobile Alliance, an alliance of 11 mobile operators in 13 markets in Asia, which aims to enhance the roaming experience and corporate mobile services of over 280 million customers in Asia.

Kwok prefers to own capacities in diverse cable systems worldwide and emphasise co-operation instead of competition. “Basically, we use a more practical capacity ownership model to run our business, and we do diversification as much as possible.” He cites the first Taiwan earthquake on Boxing Day 2006 as an example of how this model is of practical benefit. “HGC was one of the first carriers in Asia to recover and have more than 80% of its traffic back up. We also assisted a lot of regional players – and some major players – to recover their traffic. This is a physical demonstration that our philosophy of total diversification helps our business, our status in the market and also our expansion. We hold onto this philosophy. It started from the beginning of our business, and it will be our cornerstone philosophy in the future.”