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Hong Kong is one of the most densely populated cities in the world, with an average metropolitan population density of 20,811 people per square kilometre in Hong Kong Island, Kowloon, New Kowloon and Tsuen
wan.
Much of the land is hilly and unsuitable for development, confining the urban areas to the coastal strip, the foothills and the six new towns in the New Territories. The urban areas are characterized by high rise flats and multi-storey factories and offices in high rise buildings.
The working and residential population are highly communications oriented. Virtually all residences (over 94%) have a telephone service and the tradition of free local calls has created a telecommunications "culture" unique to Hong Kong.
Over the past ten years Hong Kong's population has increased by 24%, from 4.6 million in 1977 to an estimated 5.7 million today. At the same time an ambitious development programme has created new homes and other necessary infrastructural facilities for many of the inhabitants of Hong Kong. The number of households has increased by 46% over the same ten year period whilst the average household size has decreased from 4.3 in 1977 to 3.6 in 1987. At the same time Hong Kong has become a much more prosperous place; GDP has increased in real terms from HK$22,062 per capita in 1977 to HK$36,085 in 1986, an increase of 5.6% p.a. Enormous social change has taken place over the past ten years, particularly amongst the younger generation, as consumer tastes and spending patterns have altered.
2.2.2 Local network expansion
The basic franchised telecommunication services have kept pace with the expansion of demand; HKT has provided almost a million more exchange lines over the past decade. HKT's waiting list for telephone service is very short, supporting the view that they are able to supply service rapidly. The number of lines in service has almost doubled from 0.99 million in 1977 to 1.95 million in 1987. At an expansion rate of 7.3% p.a., this was almost twice as fast as the growth in households but slightly lower than the real growth in GDP, which averaged 7.8% p.a. over the same period (See Exhibit 2.3). The rate of expansion of the basic network is slowing down towards the rate of increase in the total number of households (from 8.2% p.a. from 1977 to 1982 to 6.2% p.a. from 1982 to 1987) as the network now reaches 94% of all residential households. This could have serious revenue implications for HKT, given that almost 30% of its total operating revenue is derived from rental and installation charges for local telephony [1]. HKT believes that this lower growth will be offset by four factors :
falling household size and the correspondent rise in household numbers, and hence in exchange lines,
1.
Not including the operating revenue of HKT's subsidiary companies.
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