Rogue IDD firms face crackdown

PUBLISHED : Thursday, 21 October, 2004, 12:00am
UPDATED : Thursday, 21 October, 2004, 12:00am

The government is getting tougher on external telecoms service (ETS) providers who offer IDD services without a licence, as part of efforts to placate fixed-line operators who claim 'tens of millions of dollars' of revenue is lost every year.

In a letter to fixed-line operators, Secretary for Commerce, Industry and Technology John Tsang Chun-wah said the government would help carriers recover lost IDD revenue from rogue operators.

The letter, seen by the South China Morning Post, was understood to have been sent to PCCW, Wharf T&T, New World Telecom and Hutchison Global Communications.

It was also sent to Sin Chung-kai, the legislator representing the information technology sector.

In May Mr Sin met Au Man-ho, the director-general of the Office of the Telecommunications Authority (Ofta), to press for action.

Mr Tsang noted Ofta had recently notified ETS providers that the penalty for providing IDD services in breach of licence conditions had been increased to $150,000 from $70,000 for the first offence, effective from August.

'Between May and August, we have imposed an aggregate penalty of $330,000 on ETS providers who either operate without a licence, or violate their licence conditions. We have also suspended two ETS licences,' Mr Tsang said.

ETS operators are tempted to reroute and disguise IDD calls as local ones because they avoid paying the 12.6 cent per minute local access charge for incoming calls and the 0.6 cent per minute universal services charge owed to the fixed-line operators.

The 13.2-cent total wholesale termination charge accounts for about 40 per cent of an ETS operator's cost in providing IDD services.

At the moment, those caught providing IDD services without a licence are typically charged with a summary offence at the magistrates courts, which tend to impose lighter sentences than the district court.

Mr Tsang said Ofta would now ask the director of public prosecutions to handle licence breaches as criminal offences in the district court.

He said Ofta would review the records of ETS operators to help fixed-line operators determine their losses and recover IDD revenue.