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Arrival of ISR licences gives operators more pricing options

Global One two weeks ago became the first of the big international players to secure an ISR licence.

It already serves about 200 multinational companies in Hong Kong, offering virtual private network services.

This is similar to ISR in that it can lease lines and resell them, but only to a closed user group of people within a multinational company that takes its service.

ISR licences give the opportunity to offer companies cheaper calls to anyone, irrespective of whether they are part of a corporation or not.

'With an ISR licence, many more opportunities open up,' Global One's managing director in Hong Kong, Howard Chow, said.

'Now we can offer calls to numbers anywhere in the world at a better price and quality than before,' he said.

Global One is owned by a consortium of Deutsche Telekom, France Telecom and Sprint of the United States.

Most of its existing customers in Hong Kong are the regional bases of large European companies with connections to Deutsche Telecom and France Telecom.

Rather than looking to compete with existing Hong Kong players, its main competitors are the world's other large groupings of telecoms companies offering global, end-to-end managed services.

These include British Telecom's Concert, soon to be merged with AT&T's international operations, Equant, TMI and MCI WorldCom.

Global One spent US$10 million installing a gateway switch in Hong Kong last year. It is positioned east of Chai Wan on Hong Kong Island.

Mr Chow said this gave the company more flexibility in dealing with traffic and customers.

If the market for external facilities also is opened fully, it will allow Global One to bring its own undersea cable capacity into that switch.

The Government has yet to decide on gateway licences, but Mr chow said he saw no reason why if ISR international licences had been issued 'on-demand', why international facilities licences should not also be allowed.

Global One's switch investment was higher than necessary because the company is anticipated opening of the international facilities market.

This would enhance Hong Kong's position as a regional hub for traffic, Mr Chow said, as carriers brought in capacity to take advantage of lower costs.

As for winning new business, Mr Chow said Global One would look to direct-marketing of its services to businesses. The residential market would not be a direct target, but it would participate indirectly.

Global One would be looking to resell its unused capacity to other operators, especially at times when business use was not at a peak, Mr Chow said.

Rather than have its lines idle, it would try to sell capacity to more residentially oriented operators.

The clearest targets for this are New T&T, Hutchison and New World Telephone.

Mr Chow said Global One already was working with all three companies, selling them international bandwidth.

Rather than tie-up with any specific operator, Mr Chow said he wanted to maintain relationships with all three.

If the external facilities market is opened fully, Global One can bring its undersea cable capacity into its gateway switch

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