Ruling may see cost of faxes drop by 50pc

PUBLISHED : Wednesday, 24 April, 1996, 12:00am
UPDATED : Wednesday, 24 April, 1996, 12:00am

The cost of overseas fax and data calls could be cut by half following moves by the telecommunications watchdog to open up competition against licence holder Hongkong Telecom International.

The changes could allow companies using the Internet and even video-on-demand firms leasing international phone lines to send data abroad.

The move could chip 20 per cent off Telecom business as individuals and companies bought space on the leased line at a discount to Telecom prices.

The announcement was received positively by share analysts, who said it removed a cloud hanging over Telecom.

There were fears voice calls might have been included under the liberalisation deal, hitting Telecom profits hard.

But Telecom would retain its monopoly on voice calls until 2006, said the Office of the Telecommunications Authority director-general Alex Arena.

Mr Arena said he could use the decision as leverage at current World Trade Organisation talks - to be concluded on Tuesday - to encourage other countries to open their Telecom markets. Providers of the fax and data service will have to acquire a public non-exclusive telecommunications service licence, as Internet providers do.

Guidelines for application would be published in the next two months and 'more rather than less' licences would be issued, he said, though he did not give a number.

'I suspect it will become a fiercely contested market quickly,' said Mr Arena.

'If they can get the volume there's no reason why they shouldn't offer similar discounts to callback services.' Callback phone calls to some countries are 50 to 60 per cent cheaper than those via Telecom.

In these systems, a Hong Kong caller's handset can call anywhere worldwide by linking directly through a satellite to another handset, bypassing the fixed network altogether.

Telecom welcomed the watchdog's clarification which 'provides increased clarity to the future regulatory environment' here.

The Telecom statement welcomed the commitment that international direct dial services would still be provided exclusively by the company, allowing it to plan ahead.