News Release

Hong Kong Broadband Network Deploys Cisco Metro Ethernet Switching Solution to Establish World's Largest Metro Ethernet Broadband Network

Cisco Enables Innovative Hong Kong Service Provider to Deliver Profitable and Comprehensive Network Services
Jun 27, 2002

HONG KONG, June 27, 2002 - Cisco Systems today announced that Hong Kong Broadband Network Ltd (HKBN), a subsidiary of the City Telecom Group, has deployed Cisco's Metro Ethernet Switching to establish a broadband network that is offering a broad array of profitable high-speed Ethernet-based services.

The new Cisco Metro Ethernet network currently provides coverage to more than 2,500 buildings with around one million residential homes passed -- representing over 40 percent of Hong Kong's 2.1 million households. This network solution has helped HKBN lower operating costs and bring substantially improved returns.

This new Metro Ethernet network, already the largest of its type to date, will link the majority of Hong Kong's public housing estates and private residential buildings, offering a range of converged IP-based services through a single network including broadband Internet access, local telephony and a planned digital television service delivered via Cisco's leading IP Multicast technology.

HKBN selected Cisco for its breadth of intelligent network services such as advanced Quality of Service (QoS), rate-limiting, and multicast management which are all essential elements to meeting customer demand for high quality voice and video in addition to broadband Internet connnectivity.

Through leading systems integrator Macroview Telecom in Hong Kong, HKBN has deployed a network consisting of Cisco Catalyst 2950 and 3500 switches, and a mix of Cisco Aggregation and Access Routers, including the Cisco 7200, 3600, 2600 and 1700 routers, that have been installed at in-building locations throughout the territory.

"Hong Kong Broadband Network joins a new breed of Ethernet Service Providers (ESPs) which are emerging in various parts of the world," said Andrew Murray, Cisco's vice president of service provider markets, Asia Pacific. "These ESPs are using ubiquitous Ethernet technology to fundamentally change the cost structure of providing both corporate and residential broadband services. The return on investment period is frequently very short, with the network investment often paying for itself within months."

HKBN is not alone in deploying a Metro Ethernet Solution to both the residential and commercial markets. In Italy, for example, FastWeb SpA, the Italian broadband telecommunications arm of e.Biscom SpA, is deploying one of Europe's largest Metro Ethernet Switching networks, providing business and residential customers in Milan, Genoa, Turin, Bologna, Naples and Rome with a comprehensive range of voice, video and data services. FastWeb recently announced revenues for the 2001 financial year of over 72 million euros, and 42 million euros in the first quarter of 2002 alone, thanks to an expanding customer base that has reached nearly 77,000 residential and business users.

"Cisco's Metro Ethernet solution is attractive for the network simplicity and scalability that it offers," said Ricky Wong, Chairman of HKBN. "This new network provides us with the tools to be the lowest-cost provider, yet still able to deliver a wide range of services on top of the broadband Internet access with minimal additional costs on the network infrastructure. That means it can help us generate extra revenue streams without major costs."

"Through the new network, we are offering broadband Internet access at a very low cost per subscriber, and yet we are able to provide dedicated 10Mbps connection to each subscriber. With this competitive advantage, we are confident that our subscriber base will increase from 100,000 to over 200,000 by the end of the year."

"Hong Kong home users demand the highest levels of quality and reliability in Internet and telephone services," said Frankie Sum, Managing Director of Cisco Systems Hong Kong.

"With the rapid take-up rate of broadband Internet service in Hong Kong, this next generation Metro Ethernet and IP platform allows HKBN to introduce new revenue generation services such as voice, Pay TV, and videoconferencing to increase Average Revenue Per User (ARPU)."