A looming global shift in the way telecommunications companies settle international traffic accounts could lead to a breakdown in the 'cartel-like' system, leaving Asian telephone companies vulnerable to changes in the stability and predictability of revenues, broking firm BZW Asia says. 'If firms like Hongkong Telecom are prepared to cut profitability in their home markets in order to become low-cost, high volume providers of international dial tone, they could tap new business as an Asian centre for call-back and refile,' said Lloyd Fischer, head of regional telecommunications research. He said recent proposals by the industry regulator in the United States, the Federal Communications Commission (FCC), to reshape the international settlement system had acted as a catalyst to a much greater confluence of events over the past six months. In the past, international operators paid each other relatively high fees (usually split 50-50) relative to the economic cost for handling each other's calls. This system worked while traffic flows between the countries were about equal. With the advent of call-back and refile, these flows have become grossly distorted and threaten to topple the cartel edifice. 'We anticipate the system will eventually collapse within an 18-month to three-year time frame,' Mr Fischer said. 'Although there will be explosive growth in volumes over the next 10 years, the industry may start to look like the airline business, where only a few efficient service-oriented companies and equipment manufacturers make profits.'