Discount plans for callers approved

Two months after being fined $20,000 by regulators for offering illegal cut-price international rates, Hongkong Telecom has been given official backing for a new range of tariff reductions.

The company said customers signing up for call plans could, in some cases, save more than 20 per cent on international bills.

In June, the Office of the Telecommunications Authority (Ofta) ruled that Telecom was acting in an anti-competitive manner by offering international rates below those sanctioned by the Government.

Telecom was ordered to scrap the deals and recover discounts from customers.

But yesterday Telecom deputy chief executive Norman Yuen Kee-tong said Ofta had just given its backing to three new call plans devised by the company, which offered a range of tariff reductions.

'We would like to use these call plans to rebuild, if you like, our customer relationships.' The plans have to be available to all customers by law but their structure makes them most attractive to high-volume business users, the sector originally benefiting from the illegal plans.

The Super International Call Plan has a fee of $300 per quarter but offers customers savings of up to 17 per cent on average on calls to 36 destinations.

In addition, the company offers further discounts on the bill of up to 7 per cent depending on what the customer spends per month.

Telecom's 001 flagship service charges $6.80 a minute to the United States. Under this plan the call is $5.50. Its discounted 0060 service charges $2.98 a minute for the same call, which under this plan falls to $2.50.

The other call plans offer discounts on pre-registered frequently called international numbers, and one caters for frequent callers to the mainland.

Any Telecom price reductions have to be agreed by Ofta as a way of ensuring its new local rivals have a chance to establish their businesses.

Without this Telecom could target selected customers with special prices, making it very difficult for the other companies to compete.

'We needed to give all the cost data so that Ofta is satisfied that we are not doing anti-competitive pricing,' Mr Yuen said.

Telecom's share of international traffic was 'less than 75 per cent', Mr Yuen said.