New T&T Cuts Leased-Line Rates to China, Matching Rivals
By Cathy Chan
Hong Kong, Feb. 21 (Bloomberg) -- New T&T Ltd., Hong Kong's second-biggest fixed-line phone operator, cut rates for leased lines to China by as much as 75 percent, matching offers by rivals such as Hutchison Global Crossing Ltd., a venture half-owned by Asia Global Crossing Ltd.
The company slashed fees for its private leased-line services by between 56 percent and 75 percent, near the rates charged by Hutchison. The cuts, which reflect falling interconnection fees in China, are likely to continue.
``We're expecting further double-digit reductions in the next six months,'' said Tony Cheung, marketing director of New T&T. ``We still make margins at current level.''
New T&T, a unit owned by Wharf (Holdings) Ltd., said it will cut monthly rates for so-called 64-kilobit phone lines, which are commonly used by small to medium-sized firms, to HK$1,800 ($230.8) from HK$7,288.
Hutchison Global Crossing introduced international leased- line services last month at a rate 44 percent cheaper than those offered by New World Telephone Holdings, a fixed-line unit of New World Development Co. The price cuts are likely to end the dominance of Pacific Century CyberWorks Ltd. in Hong Kong's leased- line market, analysts said.
New T&T also cut monthly charges for 128-kilobit lines to HK$3,800, or 72 percent, matching Hutchison's latest offer and nearly half the HK$6,800 rate New World is offering. New T&T and Hutchison said the new offers are valid until the end of April.
``We're very confident that the price cut will stimulate usage, and therefore the revenue impact will be insignificant,'' Cheung said.
New T&T in December slashed prices on residential calls to China by as much as 92 percent. About 46 percent of Hong Kong's outgoing calls are destined for China.
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