One.Tel offers Web access to build market strength
Small telecommunications firms have to offer multiple services to survive stiff industry competition, according to long-distance calls company One.Tel, which launched an Internet access service yesterday.
Andy Chow, joint country manager for the five-year-old Australian company's Hong Kong operation said even small telecoms firms need to offer comprehensive services to retain customers amid tough price competition.
One.Tel yesterday launched a dial-up Internet access service targeting mainly residential customers, at HK$68 per month.
The company uses competitor New T&T's infrastructure to provide its Internet service.
New T&T is offering its dial-up service at HK$75 a month.
Mr Chow would not disclose the amount it must pay New T&T, a wholesaler of Internet access services, but emphasised the company is not losing money.
He also said One.Tel's Hong Kong operation had been profitable since early this year. It was established two years ago.
Due to expenditure on expansions in Asia and Europe and high operating costs, One.Tel recorded an attributable loss of A$282 million (about HK$1.14 billion) in the year to June 30, compared with a profit of A$12.1 million previously.
Earlier this month, the company launched a long-distance calling service in Hong Kong to five large mainland cities, at a uniform rate of HK$1.28 per minute.
The cities account for about half of the company's China-bound traffic volume.
The company is hoping to differentiate itself from competitors that offer off-peak and peak-hour rates.
In October, One.Tel was ordered by the Office of the Telecommunications Authority not to post advertisements claiming it was offering cheaper calls to the mainland when five of its rivals had lower rates.
Mr Chow said the company is not making a loss on the service because it had 'international private lease circuit arrangements with a Hong Kong-listed mainland-backed telecommunications firm'.
China Telecommunications has 'inter-connection' arrangements with the major local long-distance carriers which has lowered its costs on mainland-bound traffic drastically.