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SCMP Reporter

Setback against fixed-mobile convergence  sees network operator's shares fall

PCCW, the city's largest telecommunications operator, says it will appeal   against a Court of First Instance ruling yesterday that rejected  its application for a judicial review seeking to  halt  a regulatory consultation on a fixed-mobile convergence proposal.

The Office of the Telecommunications Authority has been  gathering  public opinion on its plan to end the  system under which mobile operators pay PCCW and other fixed-line firms  for access to their networks without receiving  payment for traffic going the other way.

If implemented, it could cause PCCW to lose as much as HK$400 million in fees from mobile operators annually. Ofta  estimates the overall fees paid by mobile operators  at  HK$600 million a year.

Shares of PCCW fell 0.21 per cent to close at HK$4.66 yesterday.

'Ofta will press on with the public consultations exercise until its conclusion. We will study thoroughly all relevant submissions. [We] will make a decision on the matters as soon as possible after due consideration of these submissions,' Ofta said in a statement on its website  after the court ruling.

Under the current regime, mobile operators have to pay fixed-line operators monthly fees for traffic to and from fixed networks under a scheme that has been in effect for 10 years.  In contrast, fixed-line operators do not pay connection charges to mobile operators.

As a part of  a  convergence plan that will treat all  operators equally, Ofta suggested a two-year transition period to allow the companies time to adapt to the end of the current system and the introduction of a new interconnection agreement.

Ofta had earlier maintained  this was an auspicious time to make the change  as traffic volume between mobile and fixed-line operators has almost reached parity.

To  cut costs, the telecommunications authority  suggested  operators could simply handle the fees on a bookkeeping basis rather than shift large sums back and forth.

'[The appeal] will see no solid impact in changing the introduction of a new regime but could help  delay the time of execution,'  an industry player said.

'PCCW is likely to fight to the end to minimise its loss  under the new regime.'



PCCW plans appeal after court rejects attempt  to  block survey on access fees