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SCMP Reporter

HONGKONG Telecom's monopoly on international telephone calls is under attack by banks, television stations and financial information companies wishing to set up their own data transmission networks.

  Plans to establish their own links have the key approval of the Office of the Telecommunications Authority (OFTA).

   OFTA director-general Alex Arena said companies would be allowed to link branches using private telecommunications systems.

   The possibility of private networks or ''self-provision'', as OFTA calls it, to link branches of organisations was opened up following a government review of telecommunications last year and a previous ruling by Governor Chris Patten.

   Hongkong Telecom said it reached agreement with the Government on self-provision in June 1992, but Mr Arena said licences were only now being drafted.

   A government paper on self-provision said companies might set up private voice or data circuits for communication within companies, as long as they were not used to provide telecommunications services to third parties or individual members of the organisation.

   Tim Cureton, manager of group telecommunications at Hongkong Bank, said the bank was considering very-small-aperture satellite (VSAT) links between its headquarters and branches in Asia.

   ''In the past, Hongkong Telecom maintained that although we could do it, we would have to pay a normal tariff,'' Mr Cureton said.

   That meant companies would have to pay for their own equipment and the standard terrestrial charges.

   The new interpretation will liberate companies such as the United States' Home Box Office television station, while financial-information provider Reuters will be able to broadcast to other bases in the region before distributing data further.

   Private satellite-links have become a competitive possibility, with more and larger satellites offering spare capacity.

   Intelsat, the international satellite telecommunications organisation, has begun providing circuits on its satellites direct to users, as it introduces aggressive sales policies to compete with competition.

   Companies using self-provision will essentially be buying capacity from a wholesaler instead of a retailer.

   Organisations with large networks in China are likely to become users of self-provision licences, as high-speed data communication services are still largely unavailable on the mainland.

   The Hongkong Bank already uses VSAT communication in the Indonesian archipelago.

   According to Mr Cureton, there are two major problems with VSAT. The first is the cost of equipment.

   ''A VSAT transmission set costs US$500,000, while each receiving station costs $30,000,'' he said.

   The second problem is licence limitations in destination countries.

   ''You might be able to get your signal up, but will you be allowed to get it back down again?'' Mr Cureton said.

   China has heavy restrictions on communications - satellite dishes are officially banned although many state bodies use VSAT to communicate. The Shenzhen stock exchange alone has 300 terminals.

   Another drawback to using satellite links to transmit real-time market data is that such links mean a longer delay than cable circuits because of the extra distance involved in sending a signal 33,000 miles, to the satellite and back.

   Mr Arena said the process of drafting licences for self-provision ''should be a short one''.

   But he said his office was being heavily stretched by the process of negotiating and writing licences for new players in the fixed-link Hong Kong telephone market. New players will be allowed to compete with Hongkong Telecom from January.

   ''It is a difficult process. These are not two-page documents - the drafting is a legal process and it is time-consuming,'' he said.

   Mr Arena said his office was also still considering some 40 submissions on the applications for licences, from bodies including the Consumer Council and the Telecoms Users Group.

   He said the completed licences would also need the approval of the Joint Liaison Group.

       Mr Arena said OFTA employed 230 people but ''talking to industry and other interested parties is taking time''.



Firms set to bypass telecom monopoly