New T&T has slashed its international bandwidth charges for business customers to China following an earlier cut in mainland interconnection fees. Prices offered by the three local fixed-line operators - New World Telephone, Hutchison Global Crossing and now New T&T - are between 64 per cent and 82 per cent cheaper than those offered by Pacific Century CyberWorks. This is another challenge to CyberWorks, the former telephone monopoly, whose margin is poised to suffer from further erosion. 'The bandwidth market is similar to the IDD [International Direct Dialing] market in the sense that operators still enjoy margins even at this price level,' said Tony Cheung Tung-lam, director of New T&T, Hong Kong's second-largest fixed-line operator. 'But I am not surprised if there is a 10 per cent to 20 per cent downside in the next few months.' Mr Cheung said further pricing pressure in the telecoms sector was on the horizon with another 13 cable companies and 12 satellite operators queuing to provide bandwidth for the second half of this year. He said CyberWorks was estimated to have made HK$2 billion in the mainland's bandwidth market last year when it was first deregulated in January. However, Mr Cheung does not expect the increase in demand to improve turnover this year, despite an estimated 30 per cent to 40 per cent market growth last year and a similar rate of expansion projected for this year. Last year, the mainland's Ministry of Information Industry slashed as much as 95 per cent off international connectivity tariffs, or on average two-thirds of its normal pricing, which enabled operators to drastically cut charges. In the pricing plan unveiled yesterday, New T&T - a wholly owned unit of Wharf Holdings - said it would offer as low as HK$1,800 a month for users wanting 64 kilobits bandwidth per second (64K), a discount of up to 82.2 per cent on CyberWorks' price. The company offered similar discounts for T1, which is equivalent to 24 times the speed of 64K, at HK$21,800, compared with CyberWorks' HK$123,280 price tag. At this price, New T&T matches Hutchison Global Crossing as the lowest-cost bandwidth provider. New T&T will provide services targeting small to medium-sized enterprises in the mainland. The promotion period runs until the end of April. According to Mr Cheung, the Hong Kong-China bandwidth market size is estimated to be at 1,100 megabits per second (Mbps), or 60 per cent of the total bandwidth usage consumed this year. CyberWorks is believed to have secured 200 Mbps at the beginning of this year. This service, termed as international private leased circuit, allows customers to perform various applications such as accessing database, performing financial transactions and video-conferencing.