Telecom move seen as threat to competitors

PUBLISHED : Friday, 24 May, 1996, 12:00am
UPDATED : Friday, 24 May, 1996, 12:00am

Hongkong Telecom may be planning to move hundreds of staff from its Quarry Bay headquarters in a move opponents fear will make it difficult for them to break Telecom's fixed-line monopoly.

Telecom has confirmed it may shift staff from its $1 billion Telecom Tower to exchange buildings around the territory, where rivals will need to locate cable switches to connect to Telecom's existing network under the 'type two interconnection' deal yet to be finalised.

'If Telecom packs the exchange buildings, then that's it,' president of Wharf's New T&T, Leslie Harris, said. 'I am going straight to Ofta (Office of the Telecommunications Authority).' Co-location of switching equipment is a key part of interconnection agreements between Telecom's home cable network and the new fibre-optic networks being laid by New T&T, Hutchison and New World Telephone.

It could throw negotiations on the vital type-two deal between Telecom and its rivals into disarray.

If the new players cannot connect to the cable installed by Telecom during its monopoly over the past 100 years, it will take years for them to run their own cables.

Interconnection would come at local exchange buildings, with firms needing space for bulky computerised switches.

Ofta Director-General Alex Arena has said agreement on type two was 'very pending', while industry sources said an announcement could be made in weeks or days. Without an agreement or Ofta determination on interconnection, the new players virtually would be unable to offer local services to residential customers.

Telecom has angered industry players by seeming to play a go-slow game on reaching a deal.

'I knew there might be problems on type two, which is why as soon as we got our licence in July 1995, I went straight to Ofta to get help,' Mr Harris said. 'A year later and nothing has happened.' A Telecom official refused to comment on the competitive issues raised by such a staff move, but confirmed the group might shift staff to exchange buildings.

'This is one of a number of ideas under consideration. Nothing has been decided yet,' she said.

The move would free up to nine floors of Telecom Tower which could subsequently be let out.

Meanwhile, International Business Machines (IBM) is considering vacating the two floors it occupies in Exchange Square in Central and renting as many as six floors in Telecom Tower, according to a number of Hong Kong Island property agents.