HKT forms team to stop sales staff breaking rules

PUBLISHED : Friday, 30 April, 1999, 12:00am
UPDATED : Friday, 30 April, 1999, 12:00am

Hongkong Telecom has set up a regulatory compliance team - essentially a self-policing body - to ensure in-house marketing and sales staff work within SAR regulations.

The team was created after Telecom was determined by the Telecommunications Authority to have broken regulations on several occasions, incurring tens of thousands of dollars in fines and spurring the authority to impose stiffer penalties.

One of its most infamous practices was offering prospective or existing corporate customers free or discounted phone tariffs, some as part of a bundling deal with other services or equipment.

In February, the authority called on Telecom to set out 'steps, systems and controls' to ensure marketing and sales staff did not overstep regulatory boundaries.

Part of the ensuing compliance programme takes the form of an 'enhanced education and approvals programme' for staff, a Telecom report to the authority says.

Richard Pascoe - an authority in competition laws from Telecom parent company Cable & Wireless - has been appointed general manager for regulatory compliance.

Telecom declined to reveal the number of staff to be assigned to the compliance team.

It intends the team to handle complaints against it by competing telecoms firms and industry organisations, allowing them to take grievances directly to the source instead of to the authority.

'[Telecom] considers that many issues concerning HKT's market offerings could be resolved without the involvement of the authority's staff,' the report said.

This move is a wise decision on the part of Telecom, which - with the recent implementation of higher fines - could face rising penalties with each new offence.

However, its rivals might relish the idea of seeing it pay out hefty fines, and therefore might prefer to keep taking complaints to the authority.

Meanwhile, the authority has ruled local access charges established by Hong Kong's fixed-telephone network service (FTNS) operators were not set at unreasonable levels.

City Telecom (CTI) had complained about the charges, saying they were too high and would force long-distance rates to rise by up to 70 per cent.

CTI chairman Ricky Wong has accused Hutchison Telecom, New T&T and New World Telephone of charging unfair rates to external telecommunications service providers which offer services such as international direct dial (IDD).

IDD operators pay local-access charges to the three FTNS operators for both inbound and outbound calls. New T&T, Hutchison and New World have established local-access charge rates ranging between 44-46.8 cents per minute.

In contrast, the authority ruled Telecom must charge the benchmark rate of about 15 cents a minute because of its industry dominance.

New T&T marketing director Tony Cheung said his company used a cost model similar to that of Telecom but New T&T had higher rates because Telecom's size allowed 'economies of scale'.

Mr Wong said customers using FTNS operators for international calls would face an increase in IDD rates of between 60-70 per cent.