New T&T is countersuing rival Hongkong Telecom for withholding payment of delivery fees in the latest round of hostilities between two of Hong Kong's biggest competitors. On Thursday, Telecom announced that it was suing its two biggest rivals for $426.5 million and holding back $105.5 million in payments to the companies, It alleges they wrongly profited from a re-routing of incoming international calls. The company said that it had filed High Court writs against New World Telephone and Wharf's New T&T, in an action that sought 'restitution of improperly' diverted fees. Yesterday, New T&T announced Hongkong Telecom, or HKT, action had left it with no option other than to sue for the recovery of delivery fees which it claims were without doubt due to it and of which Telecom was wrongly withholding payment. New T&T said that it had been pressing Telecom to meet its financial commitments under delivery fee arrangements, and added it was extraordinary that they had chosen to issue the writ. '[We] cannot see any legitimate basis for HKT's claim, and the company will vigorously resist it,' NTT said, adding 'the matter is now in the hands of our lawyers'. Telecom's action revolves round a technique known as 'call hi-jacking', whereby international calls from abroad to Hong Kong are routed to a carrier other than the one for whom they are originally intended. Last year the government regulator, the Office of the Telecommunications Authority, issued a statement stopping companies from engaging in the practice. Under the mechanism a company which accepts the call not initially intended for itself does nothing other than put it on to the local network free and collects a fee known as the delivery charge from Telecom for accepting the international traffic. Customers with the caller number display function can easily tell when this is happening as incoming calls from abroad show up as local numbers. From Hongkong Telecom's point of view, it is paying out cash to its rivals for accepting calls which are originally destined for its own customers. COURT RIVALRY Telecom says rivals profited from re-routing calls and halts payments New T&T sues for delivery fee recovery