CSL, Hutchison seek to block fee increase

PUBLISHED : Tuesday, 26 August, 2008, 12:00am
UPDATED : Tuesday, 26 August, 2008, 12:00am

Two mobile-telephone operators, including a unit of Hutchison Whampoa, have filed court documents to quash a controversial 25 per cent rise in connection fees charged by fixed-line rival PCCW.

The 'unprecedented and unexpected' fee increase was approved by regulators in May without input from the city's five mobile carriers, according to separate judicial review applications filed last week by Hutchison Telephone and CSL.

Hutchison's application, dated August 23, alleged that a decision by the Office of the Telecommunications Authority to approve the increase was 'illegal, unlawful, irrational and/or procedurally improper'.

'Despite the obvious potential adverse impact ... on the applicant, the authority failed to inform the applicant or solicit its views on the proposed increase,' it said.

'There was no reason for the applicant to anticipate nor budget for a sudden and substantial [fee] increase.'

An Ofta spokesman yesterday said that as the matter was being dealt with by the appeal board, 'Ofta is not in a position to comment'.

The petition came a day after CSL filed court documents to block changes to the fixed mobile interconnection charge, which mobile operators pay to connect their customers with fixed-line users.

CSL said the higher fee meant an annual increase of HK$27 million, which would dent profit and 'have a severe impact' on operations.

There was no evidence the increase was related to higher costs at PCCW, the applications said.

PCCW, the city's largest fixed-line operator, obtained permission to increase the fee to 5.45 HK cents a minute, up from 4.36 HK cents.

Mobile operators pay the charge even if the calls do not originate on their networks, which Hutchison's application called an 'asymmetrical arrangement' that favoured PCCW.

Hutchison and CSL learned about the increase when regulatory approval was announced on May 23, 'a mere eight days before the new tariff was to take effect' on June 1, the applications said.

Ofta also approved PCCW's fee increase even though it acknowledged that it might have just been an 'anti-competitive' tactic aimed at squeezing more money from mobile operators, Hutchison's application said.

Since 1996, six previous fee adjustments had all reduced - not increased - connection fees, it said.

'[Allowing the rise] is such an unreasonable decision that no reasonable authority would have [done so].'