Rivals Say PCCW Is Obstructing Telecoms Liberalisation

by Mary Swire, Tax-News.com, Hong Kong

01 March 2002

In 1998 the Hong Kong Government paid HK$6.7 billion to Cable & Wireless Hong Kong Telecom, now a part of debt-ridden Pacific Century CyberWorks (PCCW), for the early surrender of its monopoly over international calls; but now Wharf New T&T, Hong Kong's second-largest fixed-line carrier, has attacked PCCW for charging "abusive" access fees and deterring interconnection.

Wharf New T&T vice-president Tony Cheung Tung-lan says CyberWorks had failed to carry out its commitment to other operators to increase its quota of interconnection to the local loop. Last November, the Office of the Telecommunications Authority (Ofta) said CyberWorks would run a trial at the beginning of this year to improve the progress of local loop interconnection by lifting the daily quota from nine lines per two-hour window to 16 lines, but Mr Cheung says the trial had not been carried out as scheduled because CyberWorks imposed a HK$38.80 surcharge on each line switched and this deterred other carriers from participating.

Mr Cheung complained the surcharge was unreasonable: "It's as if you order dim sum in a restaurant which charges HK$30 per dim sum. But then it says it wants to charge a higher per unit cost because we ordered more. This is not an increase in productivity."

In response to Wharf New T&T's complaint, a CyberWorks official said the one-off HK$38.80 surcharge was modest and cost-based, reflecting new and increased labour teams: "We have fulfilled our obligations. However, Wharf has not opened up its cable [TV] network to other cable TV operators yet," the official said.

The Government's goal is for at least 50% of residential households to have alternatives in fixed-line carriers by the end of the year, but Mr Cheung says the liberalisation target will be missed because of the slow progress in local loop inter-connection.

Ofta estimates that about 35% of residential customers can currently subscribe to one of the three new operators and believes the 50% target is achievable.

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