TELEPHONE TARIFFS WILL CONTINUE TO PLUNGE UNTIL JUNE, OPERATOR SAYS

The price war over international telephone tariffs will last until June with prices continuing to plunge, the chairman of one operator forecast yesterday.

Ricky Wong Wai-kay of City Telecom (Hong Kong) said: 'We foresee the price war persisting for at least six months.' Mr Wong said there was room for a further 20 to 30 per cent reduction as prices fell towards cost level, even for the most valuable markets.

'Operating costs to various countries have been cut by 20 to 70 per cent, therefore gross profits remain high,' he said.

The company, hoping to expand market share to 16 per cent from its present 9.5 per cent, has seen a 30 per cent increase in IDD traffic.

It has signed up 5,000 new customers since discount tariffs became effective on January 1.

It launched a price guarantee yesterday by calculating the rates of five main operators, including CTI, and billing customers for the cheapest.