Hongkong Telecom has been rapped on the knuckles by the Office of the Telecommunications Authority (Ofta) for a promotional package which critics say violates rules on cross-subsidy of services.
The promotion was run in conjunction with computer company Acer and enabled buyers of personal computers to obtain a second residential line and subscription to Hongkong Telecom's Netvigator Internet service free for two months.
In a letter this week, Ofta told Hongkong Telecom it disapproved of the package and advised the company to immediately end the services.
The promotion finished late last month.
Ofta's move came in response to a complaint from rival Internet providers which see bundling of such services as unfair competition. They said Hongkong Telecom was wrongly using the revenues from its monopoly international operation to subsidise the free offer.
'The main issue was if you are telling the world that you're losing money on local lines, why are you giving it away for free?' Charles Mok, of the Hong Kong Internet Providers' Association, said.
Ofta's letter did not say whether a subsidy violation had occurred.
