City Telecom (CTI) is being investigated by the Office of the Telecommunications Authority (Ofta) because of possible breaches of the industry advertising code in relation to international call offerings. New T&T last month filed a complaint with Ofta claiming CTI had left it out of its 'ultimate price guarantee' offer of free calls to certain destinations and competitor discounts. An Ofta official said the authority was processing the complaint and was expecting to reach a conclusion in one to two months. This came after a complaint filed in March against CTI, in which it was accused of excluding a competitor's promotional offer of free calls to Australia and Canada from its 'ultimate price guarantee' Web site advertisement. The complaint was later dismissed by Ofta after investigations, due to a lack of evidence substantiating the complaint. The complaints were filed amid keen competition in the industry, which saw operators launch increasingly aggressive below-cost tariffs to lure customers away from their competitors. In January, Ofta concluded New T&T was in breach of the advertising code following a complaint that one of its print advertisements had conveyed an inaccurate and misleading message, which caused confusion among customers. New T&T had said in the advertisement that all customers registered for its special offer plan would enjoy a certain lower tariff, but in fact the offer was only applicable to Wharf Cable TV customers. The Ofta official said the Government was expected to soon amend the Telecommunications Ordinance to incorporate requirements under the advertising code into the ordinance. She said the amendment would make it easier for the authority to impose a penalty on misleading and deceptive conduct by operators. The amendment, if passed, would also increase the penalty for repeated violations of telecommunications licence conditions by 10 times to a maximum of HK$1 million. New T&T lowered its tariffs yesterday on calls to Shenzhen and Shekou to 37 HK cents a minute, which is substantially below its normal per-minute cost of about HK$1.50, according to director of consumer market Tony Cheung Tung-lam. He said the firm had spent more than HK$20 million this year on advertising and to cover losses on the below-cost offerings. The company had seen its mainland-bound traffic increase 'close to threefold' since it launched a series of price reductions at the end of March. He said the aggressive price policies were part of the company's strategy to increase the importance of the mainland as its source of revenues. At present it accounted for less than 30 per cent of total international calling traffic. Meanwhile, CTI yesterday said it would include New T&T's Shenzhen and Shekou offer in its 'ultimate price guarantee' offer.