CyberWorks to break $100 home phone rate
Pacific Century CyberWorks plans to raise its monthly base rate for residential telephone charges more than 11 per cent, which would take it above HK$100, according to sources.
The company is waiting for approval for a proposed tariff increase submitted to the Office of the Telecommunications Authority last week, the sources said.
They did not disclose the exact amount of the increase being sought, but they said CyberWorks did not ask for the maximum allowed, which would have taken the rate to HK$110.
A company spokesman declined to confirm the proposed tariff changes. Reports suggested that CyberWorks, which pledged its fixed-line business for a recent refinancing of US$4.7 billion, proposed to raise tariffs to HK$108, or 20 per cent more than the present rate, but sources said that 'it would be somewhat difficult' to raise the tariff to this level.
Utilities such as Hongkong Electric proposed raising tariffs by less than 5 per cent next year and Western Harbour Tunnel proposed raising tolls by 16.7 per cent, taking advantage of an improved economy.
CyberWorks spokesman Jenny Fung said the company's plan to raise the tariff was not inflation-linked.
'We have been effectively subsidising IDD income to our fixed-line business, and that contributed less to the group earnings,' Ms Fung said.
In an interview with Business Post earlier this month, Roy Wilson, managing director of PCCW HKT, said the company would have made HK$500 million more in net profit had it chosen to raise the tariff to HK$100 on two occasions, last year and this year.
'Not everyone in the fixed-line business is making money,' Mr Wilson said. 'We have not charged enough to get our money back.'
Cable & Wireless HKT had an option to increase the local residential charge to HK$100 in January 1999, and an option to raise it as high as HK$110 this year after the former telecommunications monopoly agreed to open up the international telecoms market.
Mr Wilson also said the company had no intention of raising the tariff twice this year.
CyberWorks, which had 2.17 million residential fixed lines at the end of June, will get at least HK$217 million more a year if it is allowed to raise the tariff to more than HK$100.
Three other fixed-line operators are unlikely to follow CyberWorks' move.
'We have no immediate plan to change the tariff,' said Tong Cheung Tung-lam, director of Wharf Holdings subsidiary New T&T, the second-largest fixed-line operator.
Sources said the CyberWorks increase could come as early as before the Lunar New Year. CyberWorks is required to give customers a month's notice of any tariff increase.
