Macau's fixed-line telephone monopoly ends with new licences

New firm MTel expected to spark competition that will lead to lower charges in Macau

PUBLISHED : Tuesday, 04 June, 2013, 12:00am
UPDATED : Tuesday, 04 June, 2013, 3:57am

Macau's 32-year-old fixed-line telephony monopoly ended yesterday when the government issued two new landline service licences.

Companhia de Telecomunicações de Macau (CTM), the existing service provider, and MTel Telecommunication, a new player, each received a licence.

MTel said it and mainland phone equipment maker ZTE would invest about one billion patacas in infrastructure and the opening of new retail outlets.

CTM said it would invest nearly 500 million patacas to improve its network's systems and to expand optical fibre coverage.

MTel was the sole bidder when the landline market was opened up in March last year. The Macau government has stipulated that MTel must offer telecommunications services within 1-1/2 years.

Its network must reach 30 per cent of Macau once it starts operations and approach 100 per cent after four years.

Michael Choi Tak-meng, the chief executive of MTel and a former senior executive at CTM, said he established his company in 2011 to bid for the landline licence.

He said the company was confident it would meet the conditions set out by the government and that he expected the business to break even in 2017-2018.

It was unhealthy for Macau to have only one telecommunications service provider and the price of landline services in Macau was high when compared with other regions, he added.

Competition was expected to see telephony rates fall. Choi said MTel would charge less than CTM but that the firm had not yet decided on its exact pricing.

"When we submitted our bid last year, we said that our charges would be 70 per cent of CTM's. But we will need to re-evaluate that because CTM has since lowered its charges twice," said Choi.

He said the biggest challenge the firm faced was a manpower shortage. Getting government approval for underground cabling was also difficult, he added.

The two licences are valid until the end of 2021.

CTM, the only full-service telecommunications provider in Macau since 1981, offers landline services, internet and mobile services in the special administrative region.

The company has been criticised for its exorbitant rates and slow broadband speeds.

The World Trade Organisation said last month Macau should consider a competition law.