Hutchison Whampoa

Phone competition delay questioned

PUBLISHED : Tuesday, 14 September, 1999, 12:00am
UPDATED : Tuesday, 14 September, 1999, 12:00am

The agreement between telephone companies and the Government to delay full competition was challenged by lawmakers yesterday.

The administration announced last week that three fixed telecommunication network services would commit another $3 billion investment in return for its approval to shut out newcomers until December 2002.

Of the two million residential customers, it is estimated that up to 55 per cent may choose to switch from Cable & Wireless HKT to one of the three by the end of 2002.

Hutchison Communications (Hong Kong) will spend $2 billion. New T & T Hong Kong has committed $400 million while New World Telephone is to invest $600 million.

At a meeting yesterday, information technology and broadcasting panel chairman Sin Chung-kai asked if cash from potential investors would exceed the amount committed.

Panel deputy chairman Ma Fung-kwok also asked why officials considered the commitment satisfactory.

He also asked if customers would switch to other service providers.

'If we are just talking about providing an alternative, is that effective competition?' he asked.

Deputy Secretary for Information Technology and Broadcasting Eva Cheng Yu-wah said the amount of investment by each company was considered satisfactory in view of their business plans.

She declined to comment on investment from potential competitors, saying she had received no promises from them.

She maintained the agreement was the quickest way to provide residential phone users with an alternative.