Illegal deals cost Telecom 'peanuts'

PUBLISHED : Tuesday, 30 June, 1998, 12:00am
UPDATED : Tuesday, 30 June, 1998, 12:00am

Hongkong Telecom yesterday became the first company found guilty of widespread anti-competitive practices and was fined the largest sum allowed under the law.

However, the $20,000 penalty represents just 46 seconds-worth of the company's operating profit.

Democratic Party economic spokesman Sin Chung-kai said the fine was ridiculous. 'This is peanuts to Hongkong Telecom.' The Office of the Telecommunications Authority said Hongkong Telecom had committed 'anti-competitive practices' on a substantial scale. It said the number of customers who had accepted the illegal deals could exceed 20,000.

Details of the company's activities were revealed on June 19 in the South China Morning Post and denied by the company. Hongkong Telecom last night said it 'acknowledges and accepts' the ruling. But it complained that repeated requests for it to cut prices had been rejected by the authority.

Up to 10,000 business customers were illegally offered hotel coupons, restaurant vouchers and vouchers for Hongkong Telecom products worth up to 33 per cent of any increase in their phone bills.

In addition, up to 10,000 home customers accepted deals whereby as much as 30 per cent was cut from increases in their international phone bills.

As the dominant market player, the company must have its prices approved and cannot cut them selectively.