HKT sues rivals for $426m in 'wrong' profits from international calls

PUBLISHED : Thursday, 04 February, 1999, 12:00am
UPDATED : Thursday, 04 February, 1999, 12:00am

Hongkong Telecom is suing two of its biggest rivals for $426.5 million, alleging they wrongly profited from a re-routing of incoming international calls.

The company last night said it had filed high court writs against New World Telephone and Wharf's telecoms arm New T&T.

The action sought 'restitution of improperly' diverted fees but did not suggest either company was to blame, a Hongkong Telecom spokesman said.

In addition to the $426.5 million, Telecom was also holding back $105.5 million in payments to the companies which it was seeking court permission to retain, he said.

The action revolves round a technique known as 'call hi-jacking', whereby international calls from abroad to Hong Kong are routed to a carrier other than the one for whom they are originally intended.

Last year the government regulator, the Office of the Telecommunications Authority, issued a statement stopping companies from engaging in the practice.

Under the mechanism a company which accepts the call not initially intended for it does nothing other than put it on to the local network free and collects a fee known as the delivery charge from Telecom for accepting the international traffic.

Customers with the caller number display function can easily tell when this is happening as incoming calls from abroad show up as local numbers.

From Hongkong Telecom's point of view, it is paying out cash to its rivals for accepting calls which are originally destined for its own customers.

'We want the court to declare this money is in our account rather than theirs,' the spokesman said.

Despite more than three years of competition, the vast majority of local phone lines belong to Hongkong Telecom and the vast majority of inbound call traffic should go straight on to its local network rather than to its rivals.

'We're not saying who is at fault, we just want to get our money back,' the spokesman said.

'This is not just Hongkong Telecom and we welcome other parties to join in these proceedings.' These are the most high-profile writs issued by Hongkong Telecom in its recent phase of legal action against competing carriers.

In the past two weeks it has filed about nine writs against other companies alleging illegal bypass of its international gateway in their delivery of services.

These are different from the latest writs in that they allege breaking of Hongkong Telecom's international monopoly.

Hongkong Telecom has become increasingly aggressive in chasing alleged transgressions of the remaining period of its international monopoly status.

The company has never faced the level of competition which it now confronts, with tens of providers looking to offer overseas services.

CROSSED LINES Writs filed against New World Telephone and New T&T Telecom emphasises it is not blaming rivals over calls Firm also holding back additional payments of $105m