Operators sign overseas call deals as sun sets on monopoly
Fixed-line phone operators New T&T and New World Telephone both signed deals yesterday with international telecoms consortium Global One as part of preparations for the opening of the overseas call market in two weeks.
The deals, though different in character, are among many being worked on across the industry as operators search out cheaper routing alternatives for international calls.
The huge overseas call market is to be opened to competition for the first time on January 1, when Hongkong Telecom's monopoly on international direct dial (IDD) services on a number of routes is effectively ended.
For New T&T, a division of Wharf, the agreement with Global One is one of about six bilateral deals it plans to sign to allow it to reap the benefit of the market opening.
Earlier this month it signed an agreement with British Telecom for traffic on the Hong Kong to Britain route.
The agreement with Global One covers all destinations in the world where the international consortium can send traffic.
New T&T has also concluded a deal with Teleglobe International for traffic to Canada.
New T&T expects to announce more agreements covering the United States and another country before the end of this month.
The company would not discuss financial terms involved but New T&T chairman Stephen Ng said in general, taking into account all the accounting changes in the regulatory environment, costs would fall overall by 20 per cent.
On the question of whether the savings would be passed on to the consumer, Mr Ng said many of the special offers available were already pricing in that cost reduction.
He ruled out a price war after the January 1 deregulation.
'We're all in business to make money, not subsidise the consumer,' he said.
Global One is a consortium of France Telecom, Deutsche Telekom and Sprint of the US.
It already offers its own services to multinational companies in Hong Kong, offering the ability to link offices round the globe using one operator.
Global One greater China managing director Jacques Grezaud said the deal with New World Telephone allowed New World to be another seller of its services and target a new market sector.
'We can service a wider community of customers,' he said.
For New World, linking with Global One allows it to extend its services for Hong Kong business customers to a global environment.
These services primarily involve moving data, using technology known as frame relay, between an organisation's offices in the SAR.
The deal with Global One allows New World to offer that service to a organisation's offices outside Hong Kong.
The newer advanced services will also allow voice, data and video to be carried down one line in the future and will allow New World to offer this integrated service to customers.
It already offers local frame relay services in Hong Kong to organisations such as the Jockey Club.
New World Telephone commercial director Frankie Lai said companies were already asking him if it could extend the service outside the SAR.
New World Telephone wants to position itself among fixed-line rivals as the company offering global multimedia services.
