HK Telecom Regulator Warns PCCW For Fixed License Breach
DOW JONES NEWSWIRES
HONG KONG -- Hong Kong's telecommunications regulator issued a severe warning to dominating fixed-line operator PCCW-HKT Telephone Ltd. after finding it failed to comply with conditions of its license.
The Office of the Telecommunications Authority said it found that on more than one occasion PCCW-HKT didn't meet deadlines for the transfer of fixed-line subscribers to other providers. Rules governing the transfer of subscriber telephone numbers so they can use the same number with their new provider, a practice known as "number portability," generally require that the transfer be done within one working day, except when the donor network will continue to supply the local access link.
The warning followed complaints by two of the other three operators, who claimed that PCCW-HKT had not responded to some of their requests for the transfer of fixed-line subscribers within the stipulated time.
The Office of the Telecommunications Authority said it found that PCCW-HKT failed to reply to 83 requests for number portability from New World Telephone Ltd. on Oct. 8 last year within the required time frame. PCCW-HKT, a wholly owned unit of integrated telecom company Pacific Century CyberWorks Ltd. (PCW), also failed to respond to 454 out of 1,905 requests from Wharf New T & T Ltd. on three different occasions in October 2001, OFTA said in a press release.
The regulator said that to ensure that the telephone number transfer scheme functions smoothly it is "crucial for licensees to observe their respective license obligation."
This is especially important with regard to the processing of applications for transfers of subscribers to a different network, it said, because failure to comply would hurt the image of the recipient network operator and its ability to compete in the market.
"For this reason...arbitrary stoppage of processing of number portability requests is considered to be a serious breach, which should not be tolerated," OFTA said.
Because this is the first time PCCW-HKT has failed to comply with the response time requirements and it has taken action to deal with the overdue requests, however, OFTA considered the warning a sufficient penalty.
OFTA stressed that it has urged PCCW to comply strictly with the license conditions. Should a similar breach occur in the future it will likely result in a financial penalty, it said.
PCCW-HKT's monopoly in the fixed-line market ended in 1995, when the regulator grated three more fixed-line licenses to Wharf New T & T, New World Telephone and a unit of Hutchison Whampoa Ltd.
The three new operators have been slow to expand, however, especially in the residential market, where PCCW-HKT still has a market share of around 90%. Some operators have at times blamed the slow pace in part on the difficulty of gaining access to buildings to roll out their networks.
In a response to OFTA's warning, PCCW said the regulator's strict liability interpretation of its license is "both unreasonable and extreme."
The company said OFTA's strict interpretation of the response time requirements doesn't take into account the total number of requests for number portability received at the same time. "The unreasonable 24-hour lead-time makes it extremely difficult for PCCW to schedule adequate staff to handle sudden upsurges of number portability requests," it said.
PCCW said it has proposed a contingency plan to address unforeseen increases in requests on a particular day, and is surprised that OFTA issued the warning while still in the process of considering this proposal.
In addition, PCCW said it has provided services related to the transfer of subscribers to different networks since 1995 without problems but "has never been paid by the (other fixed-network operators) accordingly.///"/// The accumulated overdue amount exceeds HK$30 million to date, the company claimed in a release.
"PCCW is disappointed that it has to provide number porting services to (the fixed-network operators) under a stringent regulated framework while being unable to recover its costs," it said.
New World Telephone is controlled by property conglomerate New World Development Co. (H.NWD) while Wharf New T & T is controlled by conglomerate Wharf Holdings Ltd. (H.WHF).
-By Anette Jonsson, Dow Jones Newswires; 852-2802-7002; anette.jonsson@dowjones.com
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Updated March 13, 2002 10:18 p.m. EST
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