City Telecom eyes Internet
Discounted international call specialist City Telecom (HK) says it is looking at the opportunities offered by using the Internet to sell cheaper long- distance services.
As the law stands, using the Internet for voice traffic to bypass existing international accounting rates, is illegal as it contravenes Hongkong Telecom's international monopoly.
City Telecom chairman Ricky Wong Wai-kay said the company was preparing for a position where the government might relax the rules as part of an agreement with Telecom to bring its international monopoly to an early end.
'We'll have to wait for an announcement in the new year. We need to see what the government does on the legal terms,' he said.
Many observers believe that as part of an agreement with Telecom, the Government will allow the introduction of what is known as international simple resale (ISR) of voice traffic.
This would allow operators to buy bulk international line capacity and sell it at discounted rates well below those now charged by Telecom.
Mr Wong said he did not think this would happen for a year or two.
'If the government allows voice ISR there is no room for Internet telephony but if you don't allow it then there is,' he said.
Much of City Telecom's business is based on using the call-back technique to get cheaper line costs.
Mr Wong admitted the introduction of ISR would mean changes in technology for City Telecom's business - but would not mean altering the way it offered or marketed its services.
'It is cheaper and more cost effective. ISR of voice will replace the existing call-back services,' he said.
The company's customers would not know the difference if it switched to using ISR, he said.
'As far as they are concerned we would still be serving the same cake.'