bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

Hongkong Telecom is facing its most serious allegations of predatory pricing after competitors accused it of ignoring a government directive against unfair market practices.

 Documents seen by the South China Morning Post indicate the firm's sales staff have been slashing the price of international calls for customers who have switched to competitors.

 The allegations follow a directive from the Government in April that the firm stop 10 types of marketing deals that had the effect of 'substantially restricting competition'.

 If it is found to have broken this directive, it would face being fined for the first time.

 One sales offer to a customer who had signed with a competitor included a volume discount of up to 20 per cent on top of a discount plan.

 Another offer, sent without a Hongkong Telecom letterhead, offered a 30 per cent discount on IDD bills in the last two weeks of June and a 15 per cent discount on IDD calls until March 1999.

 By law, the company is not allowed to charge below published rates without approval, because it has been classified as the dominant operator.

 With Hongkong Telecom sitting on a cash mountain soon to reach $15 billion, competitors allege the firm is trying to squeeze rivals out of the market so it can return prices to pre-competition levels - in some cases double today's rates.

 Adrian Walker-Smith, principal trade practices officer at the Consumer Council, said that if the allegations were true they were 'a classic description of predatory pricing'.

 Gary Chow Ding-man, Hongkong Telecom's general manager for corporate markets, denied the firm was deviating from published prices.

 'We have clear sales guidelines . . . There might be cases where people were making offers not according to the guidelines, but if these cases happen we are keen to look into them.'  Mr Chow said the firm was strictly complying with the April directive - and that it was not surprising there were complaints in a highly competitive market.

 A spokeswoman for Hongkong Telecom said: 'It is Hongkong Telecom's policy to compete vigorously and fairly in the markets for our services and products, while complying with all of its regulatory obligations.'  All three fixed-line rivals claimed unfair competition. At least two formal complaints have been made in the past two days.

 Leslie Harris, president of New T&T, said the cut-price deals might look attractive 'but in the long term they put [the consumer] in a worse position'.

 Peter Wong King-fai, fixed network director of Hutchison Telecom, said his firm was 'very, very concerned' about market abuse.

 Director of Telecommunications Anthony Wong Sik-kei was unable to comment on complaints under investigation.



Telecom 'predatory pricing' row