IDD call prices to dip as 31 firms win bulk-sale licences

PUBLISHED : Thursday, 14 January, 1999, 12:00am
UPDATED : Thursday, 14 January, 1999, 12:00am

Customers could soon be paying close to cost price for overseas calls, with at least 31 companies winning IDD licences.

Director-General of Telecommunications Wong Sik-kei said more than 70 applications for International Simple Resale (ISR) had been received since January 1 when Hongkong Telecom's monopoly ended.

Up until yesterday, 31 licences - costing $750 each - had been issued by the Office of Telecommunications Authority and the rest of the applications should be processed by the end of the month.

ISR allows companies to rent bulk capacity from Hongkong Telecom and resell it.

Mr Wong believes competition will eventually drive many companies to charge close to cost price when cheap bulk selling becomes widespread.

The open market would establish its own self-regulatory mechanism and the likelihood of a few companies dominating the market was slim, he said.

'If the company is not providing a good service, consumers will switch to another company. And it will also be easy to switch,' Mr Wong said.

IDD call prices have fallen 20 to 30 per cent since January 1.

Prices could be expected to drop by up to 50 per cent by January 1, 2000, when rivals were not required to buy capacity from Hongkong Telecom, Mr Wong said.

City Telecom (CTI) triggered the price war on December 30 when it announced a package slashing regular rates up to 67 per cent.

CTI is expected to announce plans to cut its IDD prices further tomorrow.