On the right lines

PUBLISHED : Saturday, 24 October, 1998, 12:00am
UPDATED : Saturday, 24 October, 1998, 12:00am

There is no place for halfway houses when it comes to competition in the international telephone call market. Some companies which were all in favour of greater competition when Hongkong Telecom still enjoyed a monopoly have become more hesitant about the idea now that they too have licences to operate telephone services.

In their submissions to the Government's recent review of the phone market, New World Telephone and Hutchison both favoured limiting the number of companies licensed to compete with them, while New T&T also expressed reservations about unrestricted competition. Fortunately, the administration decided differently; from January 1, an important part of the international direct dial market will be opened to almost anyone who asks.

At a stroke, getting a licence to operate international simple resale (by which rivals lease their lines from Hongkong Telecom) will become easier than getting a dog licence. The presumption must be that unrestricted competition will similarly be allowed in all other aspects of the international telephone calls market when these are opened up on January 1, 2000.

That is as it should be. In an increasingly competitive international environment, the price of communications is a key factor in determining where companies are based. Hong Kong is starting to fall behind in this respect. In some cases, calls made out of the SAR are now more expensive than those in the opposite direction. Regional rivals, such as Singapore, have cut their prices repeatedly in recent years.

The advent of full competition over leased lines will allow cheap callback services to be provided with better line quality. This will benefit businesses who have so far been reluctant to use them. It should also lead to lower prices, although the full effects may not be felt until 2000.

Care needs to be taken that Hongkong Telecom is not allowed to abuse its dominant market position. So far the Government has not been particularly vigilant on this front, and the repeated complaints by rival phone companies have some substance. But that does not justify their lobbying against full opening-up of the market. The time for limited competition is long past. Hong Kong can only benefit from this decision by the administration.