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While most of the running in Hong Kong's newly deregulated international market has been made by local companies, behind the scenes the world's biggest telephone companies are hard at work.

 The likes of AT&T, British Telecom, Cable & Wireless and Global One are not selling services direct to the public but to the myriad new and established operators looking to take advantage of the change in market conditions.

 AT&T this week signed a deal with New World Telephone to deliver its calls to more than 200 destinations worldwide.

 The deal means AT&T sells its capacity to New World at an undisclosed wholesale rate, allowing New World to market the service and decide what to charge retail customers according to its choice of margin.

 In industry jargon, AT&T is acting as a 'carrier's carrier'.

 Telecoms liberalisation has encouraged a proliferation of new international service providers and the big global players want a slice of the action.

 'As a new carrier starts to establish itself, its fundamental activity is to focus on customers rather than establishing, say, 200 bilateral connections,' AT&T vice-president of carrier services for Asia-Pacific Phil Overmyer said.

 The big global carriers are betting that the pricing power they have and the ease of dealing with one company for routes to all countries will attract new international service providers to them.

 Some operators in Hong Kong have chosen to do just this, although not all deals are exclusive.

 It is likely that New World will use other capacity providers as well as AT&T. It already has signed a deal on international data traffic with Global One.

 In practice, Hong Kong suddenly has a vibrant market in wholesaling international traffic.

 'We are always looking for opportunities to sell our service,' Mr Overmyer said.

 The theory is that selling minutes of airtime at a lower price is better than not selling at all.

 This means the price of international capacity can fluctuate with time, and pricing increasingly will behave like a commodity.

 As wholesale prices change, so may the provider of choice for the local international companies.

 So, while you may place an overseas call through a local service provider, in reality the call could go down a line provided by AT&T one day, then BT or MCI-WorldCom the next.

ANDREW CHETHAM 



Global heavyweights lurk behind fight for deregulated IDD market