Hong Kong's new International Simple Resale (ISR) licensees have been rushing to secure bilateral agreements with foreign long-distance firms ahead of the January 1 'deregulation day' for open competition in long-distance services. But the rush has also been coming from the other way as the major foreign long-distance firms are eager to recapture market share lost in recent years to the callback providers. On Wednesday, British Telecom (BT) and New T&T announced the latest bilateral deal to provide external telecoms services. Last week, New T&T and New World Telephone signed similar deals with North American long-distance firm Teleglobe. Paul Lessells, BT's head of correspondent services in northeast Asia, said: 'This is good for BT because in the past a lot of traffic between Hong Kong and the UK went via Canada and the United States through the callback services.' From next month, long-distance call providers with an ISR licence - there are 10 so far - will be able to lease circuits direct from Hongkong Telecom, enabling them to buy long-distance minutes in bulk to deliver telecom traffic out of Hong Kong. Previously, the only long-distance call competition to Hongkong Telecom's International Direct Dial (IDD) service was through callback technologies. These offer consumers lower call charges than IDD by rerouting calls out of the SAR so that they originate at a foreign destination, thus drawing on the difference between lower foreign tariffs and Hongkong Telecom's prices. 'Many years ago, that traffic would have gone direct to the UK - now we're bringing that back to the UK,' Mr Lessells said. While the New T&T deal is BT's first so far, Mr Lessells said BT eventually hoped to have about three such agreements in place, presumably with all three main 'baby-tels' - Hutchison Telecom (which is also a partner in BT's Concert service), New T&T and New World Telecom. 'We will sign other agreements for sure - it's important for us to capture business that used to go via US and Canada and bring that back to BT. From a revenue point of view, it's very attractive,' he said. Mr Lessells said the new environment would be positive, not only for BT but for the entire market as well. 'It's good for us and it will lead, hopefully, to competitive pricing for New T&T in terms of the services we're offering and our price,' he said. 'It should help make local long-distance services higher quality.'