HK New T&T Files Complaint With OFTA Against PCCW
Updated: Wednesday, April 25, 2001 01:47 AM ET
HONG KONG (Dow Jones)--Hong Kong fixed-line telecommunications operator New T&T has submitted a complaint to the industry regulator detailing what it calls "anti-competitive acts" by the dominating player in the fixed-line market, it said in a statement issued late Tuesday.
In the complaint to the Office of the Telecommunications Authority (OFTA, news, msgs), New T&T is urging the government to put an end to the "current unfair situation" and to promote fair and effective competition.
In the statement, New T&T alleges that the former monopoly carrier, Pacific Century CyberWorks Ltd. (PCW, news, msgs), is abusing its dominant position. Since the liberalization of the fixed-line market in 1995, it has "sought to delay provision of interconnection services and impose excessive charges for the purpose of restricting competition," said New T&T, which is owned by conglomerate Wharf Holdings Ltd. (H.WHF, news, msgs).
As a result, PCCW still controls 95% of Hong Kong's total fixed-line market, while the other three fixed-line operators have managed to capture only 5%, New T&T said. However, it said, this isn't due to a lack of commitment by the three newcomers, which also include Hutchison Telecommunications and New World Telephone, which have jointly invested more than HK$10 billion in network infrastructure.
"But investment alone can't surmount the barriers in the form of anti-competitive conducts and abuses of dominance," New T&T added.
In the statement, it accuses PCCW of imposing excessive charges for various interconnection services, of delaying access to co-location sites and of purposely imposing administrative barriers for customers wanting to switch to another network.
Regarding the formal complaint, a PCCW spokesman said the company "can't comment on how (New T&T) deals with this" but added that the press statement referring to the complaint doesn't appear to contain anything new compared with last time New T&T and PCCW discussed these issues.
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This latest complaint by New T&T regarding anti-competitive acts, which OFTA said it received in early April, follows several earlier complaints by the operator in which it has accused PCCW of restricting its access to network lines.
As result of these, OFTA issued a so-called determination last month, outlining the terms and conditions for the interconnection between the fixed-line networks of New T&T and PCCW. If those directions aren't followed by the parties, OFTA can impose financial penalties, the spokeswoman said.
In the latest statement, New T&T, which is the second largest fixed-line operator in Hong Kong, also accused PCCW for having charged "exorbitant fees" for various interconnection services for several years.
PCCW has, however, said earlier that interconnection charges in Hong Kong are low compared with some other deregulated markets. According to the company they are 85% lower than in Japan and 62% lower than in the U.S.
New T&T is also accusing PCCW of being too slow in handling the applications from customers wanting to switch to another operator by claiming it can handle only 60 applications per co-location site a day. New T&T on the other hand believes it should be able to get through 240 such requests per site a day.
The PCCW spokesman said the process of switching a customer to another network takes a coordinated effort by all four network operators in order to make sure that phone calls to a specific number are routed to the correct network. He said PCCW can handle 36 applications per day per site and 60 if it works overtime, although that also requires workers from the other operators to put in overtime.
New T&T argues, however, that the long waiting times together with the high charges mean Hong Kong consumers don't have a real choice when it comes to fixed-line services, even though OFTA has set a target that 50% of all consumers should have a choice of fixed line operators by 2002.
"The cornerstone of effective competition is to put an immediate stop to the anti-competitive practices of PCCW...We are counting on the regulator to curb all anti-competitive conduct and the abuse of dominance in the market," it said.
An OFTA spokeswoman said the regulator is still studying New T&T's latest complaint and will allow both parties to state their case before making a decision on whether to intervene with a ruling. This process could take several months, she said.
-By Anette Jonsson, Dow Jones Newswires; 852-2802-7002; anette.jonsson@dowjones.com
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