New World Telephone will use MPLS (multi-protocol label switching) equipment from Cisco Systems to offer VPNs (virtual private networks) to business customers from the first quarter of next year. New World, one of Hong Kong's four fixed-line operators, said its VPN service, which would include mainland connectivity thanks to a partnership with China Telecom, would be priced at about half the going rate for private leased circuits. VPNs, already offered by a number of network providers, use shared circuits to pass traffic. Prices are often lower because they use Internet protocol (IP) technology to route packets and do not require leased lines. A company with two offices in the mainland and one in Hong Kong would pay HK$16,000 a month for a New World VPN, compared with HK$30,500 for leased circuits, the company said. Gary Jackson, Cisco's vice-president for Asian operations, said some market estimates put the business usage of VPNs at 70 per cent by 2004. Network operators faced thinner margins and could use IP-based technologies to add more services, he said. New World has an estimated 15 per cent of Hong Kong's international call market.