PCCW plans appeal after court rejects attempt to block survey on access fees

PUBLISHED : Wednesday, 14 February, 2007, 12:00am
UPDATED : Wednesday, 14 February, 2007, 12:00am

Setback against fixed-mobile convergence sees network operator's shares fall


PCCW, the city's largest telecommunications operator, says it will appeal against a Court of First Instance ruling yesterday that rejected its application for a judicial review seeking to halt a regulatory consultation on a fixed-mobile convergence proposal.


The Office of the Telecommunications Authority has been gathering public opinion on its plan to end the system under which mobile operators pay PCCW and other fixed-line firms for access to their networks without receiving payment for traffic going the other way.


If implemented, it could cause PCCW to lose as much as HK$400 million in fees from mobile operators annually. Ofta estimates the overall fees paid by mobile operators at HK$600 million a year.


Shares of PCCW fell 0.21 per cent to close at HK$4.66 yesterday.


'Ofta will press on with the public consultations exercise until its conclusion. We will study thoroughly all relevant submissions. [We] will make a decision on the matters as soon as possible after due consideration of these submissions,' Ofta said in a statement on its website after the court ruling.


Under the current regime, mobile operators have to pay fixed-line operators monthly fees for traffic to and from fixed networks under a scheme that has been in effect for 10 years. In contrast, fixed-line operators do not pay connection charges to mobile operators.


As a part of a convergence plan that will treat all operators equally, Ofta suggested a two-year transition period to allow the companies time to adapt to the end of the current system and the introduction of a new interconnection agreement.


Ofta had earlier maintained this was an auspicious time to make the change as traffic volume between mobile and fixed-line operators has almost reached parity.


To cut costs, the telecommunications authority suggested operators could simply handle the fees on a bookkeeping basis rather than shift large sums back and forth.


'[The appeal] will see no solid impact in changing the introduction of a new regime but could help delay the time of execution,' an industry player said.


'PCCW is likely to fight to the end to minimise its loss under the new regime.'