HKT weathers deregulation of international-call sector

PUBLISHED : Tuesday, 26 January, 1999, 12:00am
UPDATED : Tuesday, 26 January, 1999, 12:00am

Hongkong Telecom (HKT) has weathered the January 1 deregulation of the international-call market 'better than expected' and suffered little dent in market share.

Since Telecom's monopoly was partially dismantled, a price war has been waged between its key competitors in an effort to increase business.

Most observers have predicted deregulation will inevitably erode Telecom's market share.

In the company's first assessment of the results of competition, Telecom's International Direct Dial (IDD) marketing manager Thomas Leung said the company had 'not been affected' overall.

International-call volumes had risen by 5 per cent but this might not be sustained, he said.

IDD is riding on a wave of publicity prompted by the opening of the international market though it could easily subside.

'It is still too early to tell if this will be sustained but I don't think it will be.' As of last Friday, the Government had issued 40 licences to companies wishing to offer international calls.

Overseas calls still have to be routed through Telecom's external gateway facilities, enabling it to get a clear picture of what is happening in the international market.

Most competitors have concentrated on cutting prices during off-peak hours rather than undermining the higher margins on daytime business-dominated traffic.

On this, Mr Leung said Telecom had 'not been touched' by the efforts of competitors.

One reason was that the key global players have not appeared in the market yet.

The issuing of so many international licences was of little consequence, Mr Leung said.

The real activity is from the five biggest players in the market - Telecom, Hutchison Telecom, New World Telephone, New T&T, and CTI.

Many of the best offers have been for calls made between midnight and the early hours of the morning.

Mr Leung said initially, Hongkong Telecom saw its traffic drop 'a bit' during the 1am to 2am time slot as people 'took the pain' to try these services. However, its share of call traffic had returned soon after.

Between 3am and 7am, the company had seen no change to its traffic share, he said.

International traffic between 1am and 7am accounted for only 2.5 per cent of its international volume, Mr Leung said.