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CNBC Transcript: Paul Berriman, Chief Technology Officer, Technology Strategy & Development, PCCW

Following is the transcript of a CNBC interview with Paul Berriman, Chief Technology Officer, Technology Strategy & Development, of PCCW . The interview was broadcast on CNBC on 27 April 2017 at 11:40AM SG/HK Time, during CNBC's "Hong Kong versus Singapore" theme week.

All references must be sourced to a "CNBC Interview".

Interviewed by Martin Soong, Anchor, CNBC, Chery Kang, Correspondent, CNBC, and guest host Neeraj Seth, Head of Asian Credit, BlackRock.

Martin: So run this through. I mean you got sort of a vested interest in this but in your mind and I'm sure you've travelled to all kinds of different places, how does Hong Kong stack up in terms of being innovative in terms of connectivity versus say a place like Singapore?

Berriman: Well Martin I can only speak really about telecoms and media because that's really where we're involved here, but Hong Kong is very much up there. I think that's the major thing that drives innovation is here in Hong Kong is the fact that there's so much competition in our industry. We have so many fixed network operators, mobile network operators, pay TV operators that, you know, we have to be innovative to stay ahead and we really have to push and find new innovations, and our existing core businesses are so commoditized that anything new has to come from innovation, and we have to start looking at new adjacencies whether it's in the media side or whether it's in the Smart City or some of the other new areas of business that we can get into. Which I guess it would say we have to start eating somebody else's lunch rather than having them eat our lunch, and that's been what's driven our innovation.

Chery: Paul, this is Chery joining the conversation. I noticed the ICT exports as well as imports, those are some of the lowest ranking items for Hong Kong in their 2016 global innovation index, what do we need to focus on that and is there any room for us to find anything in Hong Kong specific?

Berriman: Well I guess we have to balance what is fundamental R&D in terms of innovation and what we need as a telco or a media company in terms of bringing in new innovations and we don't do a lot of fundamental R&D ourselves. We do actually work with ASTRI, advanced science and technology research institute in bringing in some of those technologies, but a lot of them come from overseas and we just look to how we can build them into our value chain to make more money out of them in Hong Kong or within our telecoms business.

Neeraj: Paul, if I step back and think of some of the key ingredients obviously required for innovation and having the culture of risk taking and the ability to fail and not just succeed and then the implementation which is obviously not having the bureaucracy when you think about implementing a lot of these solutions not just from a telecom perspective but from a broader standpoint, what do you see in Hong Kong where the gaps where you see our hope to see more push?

Berriman: Okay. I think some of the areas that we need to have is where we get more guidance and standards and mandates from the government to bring all of things together which are quite…often quite segregated. I'll give you a very good example a few years ago when all of the road tunnels were built, they were built in the contract and each one put in there or in what you would call you know connected cars one point zero where they had their own auto toll pass for getting through the tunnels. But each one had its own standard and consequently drivers had to had different types of pass to get through the different tunnels. Now as we move towards Smart Cities and we started to put in smart parking in this type of thing, what we don't want to have is each different car park having a different system on a map on a different map or a different app on their mobile phone. We need to have a single method that can only come from some leadership and guidance and standards from the government and I think that's where there's a bit of a gap at the moment.

Chery: And Paul, how much of how do you bet on this innovation fund idea that was suggested by the government recently or the innovation and technology part on the border with Shenzhen? Do you believe that they will bring tangible results for companies like yours and other companies that are trying to innovate?

Berriman: We've seen a lot of innovation out of Hong Kong and a lot of it is driven by people in Hong Kong coming up with an innovation and then using the resources and the capabilities across the border in Shenzhen and actually turn them into product. I think drones are a very good example where they were initially designed and built in Hong Kong but then the factories were set up in Shenzhen, and that's really where we'd see it going. We see a lot of innovation, but at the same time you know we have to find innovation that actually fits into our business models as well and occasionally we do get those things coming out of people like ASTRI, but on the other in other areas we have to look at the field. Well I would say that for us, personally as a telco, we work very closely with the manufacturers just over the border who supply most of our 2G 3G 4G fibre networks and quite often they're their innovation place where we can be the guinea pig. Hong Kong is a great place, it's right next to the Shenzhen and they can try out some of their innovations on us and if they work, take them to a wider the market.