City Telecom has stepped up its assault on the traditional voice market, unveiling a new internet telephony service on Thursday that allows customers to dial fixed-line or mobile phones from their computers. The service, offered through its Hong Kong Broadband Network (HKBN) unit, will cost less than $38 per month and include extras such as video calling, instant messaging, online phone books and conference calling. City Telecom chairman Ricky Wong Wai-kay forecast the demise of fixed-line networks as voice over internet protocol (VoIP) services crop up to replace them. 'The traditional fixed-line business is dying ... I'd be surprised if by 2006, Hong Kong still had one million fixed-exchange lines left,' Mr Wong said. The city presently has about 3.78 million fixed lines. In August, City Telecom launched its first VoIP service. In that service an adapter box is attached to a broadband modem and computer, and a telephone is then connected to the adapter. The new service does away with the adapter and is similar to offerings from companies such as Skype Technologies. Mr Wong said 1,000 subscribers had joined the PC-to-phone service since the soft launch in August and marketing would start next week. 'We are talking with various 3G mobile operators about interconnecting with them on video calls,' Mr Wong said. He also took a swipe at dominant carrier PCCW, which has sought to defend market share by allowing customers to send short messages over their fixed lines. 'Phones with text messaging capabilities are useless,' Mr Wong said. Tensions are high between City Telecom and PCCW. Earlier this month, PCCW filed a lawsuit against the telecoms regulator, asking the High Court to order the closure of City Telecom's VoIP service. PCCW objects to the internet telephony service, saying it allows City Telecom a free ride on its Netvigator broadband network. It is not clear how PCCW would respond to City Telecom's PC-to-phone product - users can also access the service via Netvigator - although company officials said earlier they had no objection to Skype-like offerings. PCCW officials declined to comment yesterday. Mr Wong has made no secret that his VoIP services target PCCW, which still commands 70 per cent of the voice market. Wharf T&T and New World Telecom are also offering VoIP services, but over their own networks. In November last year, Hutchison Global Communications (HGC) launched Vfone, which combines voice and video telephony and is available over other operators' networks, including Netvigator. On Wednesday, HGC launched an international direct dial plan via Vfone that allows unlimited calls to 20 countries for a flat rate of $88 per month. Mr Wong said HKBN would consider launching a similar service to match its rival. He also said he expected HKBN's pay-television business to become profitable by 2006. He said it now had 40,000 subscribers paying a monthly fee of $128, $20 higher than last month.
