A price war is looming in the long-distance telecommunications market, with Wharf T&T on Wednesday announcing a 75 per cent reduction for calls to China for its corporate clients.
The Wharf (Holdings) unit is lowering its mainland calling charge to 17 cents per minute from 67 cents - its second reduction in four months - in a bid to grab market share from rivals.
The three-month promotional offer is believed to be aimed mainly at the IDD business of City Telecom, whose pay-television services to be launched in summer will be a threat to market-leader i-Cable Communications, a subsidiary of Wharf.
Wharf T&T's vice-president Tony Cheung Tung-lan said it aimed to offer low prices in a market not known for its transparency. 'It is also our long-term strategy to target City Telecom for more market share,' he said.
City Telecom reported a $162.3 million profit from its IDD business for the six months to February on a turnover of $468.57 million.
Chairman Ricky Wong Wai-kay said it had 760,000 active IDD users, with income equally split between commercial and residential subscribers.
The company, which posted an interim net profit of $112.87 million, has relied on cash flow from IDD to roll out its loss-making fixed-network services, and now its pay-television operation.
