Talk is cheap as firms cash in on HK technology (hktdc.com)


	There are no boundaries to Hong Kong's telecommunications savings, which can now be enjoyed by companies not actually located in the city

Hong Kong already has some of the world's cheapest phone rates – but that hasn't stopped the city's telecoms regulator from proposing new liberalisation steps to promote even keener competition as fixed and mobile technologies converge.

The measures will be welcomed by the foreign business community which counts on low-cost, efficient and reliable telecommunications as a key reason for selecting the city as a base.

According to a United Nations report, Hong Kong has been chosen as the Asia headquarters for 3,800 multinational firms. Its top quality and cheap telecoms services are boon for many sectors which make heavy use of them, including legal, accounting and financial services, the media and advertising.

"It is probably one of a combination of factors when looking at Hong Kong as a place to do business. Certainly the telephone system here is very cost effective," said Anthony Lloyd, head of the Asia technology and communications group at law firm MinterEllison.

Calling the world


	SG Lim, executive director at e-Kong, says reforms to liberate Hong Kong's mobile sector will reduce phone charges even further

Callers from Hong Kong can pay as little as HK40 cents (US 5 cents) per minute to countries with liberalised telecoms regimes including United Kingdom, the United States and Australia.

Even calls to Asian countries which have not fully liberalised their telecom sectors are relatively cheap. Hong Kong callers can, for example, reach Thailand for HK$1.09 (US 14 cents) a minute.

Some colleagues dialling from abroad keep their calls to a minimum to try and keep their phone bills down, said Mr Lloyd. "You don't have the same sort of issues when making long distance calls to other countries (from Hong Kong)," he said.

"I think Hong Kong was one of the first to open up the market to competition and it has worked perfectly, though there aren't a large number of (telecom) players."

Hong Kong opened up its telecoms market back in 1995 when the monopoly franchise on the old Hong Kong Telephone Company expired. Competition among five fixed-line operators and another five mobile companies has been driving down rates ever since.

Despite fierce competition, the market has kept growing in size as the cheap rates attract more users and encourage more frequent calls. Last year, gross telecommunications revenues grew 3.3 per cent to HK$46 billion (US$5.9 billion).

Mobile reforms

The new proposals to liberate the sector come from the Hong Kong regulator, Office of The Telecommunications Authority (Ofta). It suggests the abolition of the "mobile network party pays" system in which cell phone operators pay fees to connect calls to fixed-line players' networks – but fixed-line operators don't pay fees for connections to mobile networks.

Ofta suggests replacing the system with a "bill and keep arrangement" which will result in the caller's phone provider, whether mobile or fixed-line, not having to pay anything to the called-party's phone provider. The proposals, which are now out for consultation by the industry, also include the deregulation of the local access charges leading fixed-line operator PCCW and its rivals levy for access to their networks.

The reforms are intended to level the playing field between mobile and fixed-line operators as technological advances blur the lines between the two.

"I think it will be a good plus for the city," by reducing consumers' bills and encouraging Hong Kong telecom companies to stay at the cutting edge of innovations, said SG Lim, executive director at e-Kong, a Hong Kong-based discount phone service provider.

Hong Kong companies such as e-Kong are already using internet technology so foreign companies can benefit from Hong Kong's cheap phone rates – even if they are not in the city.

Trading companies have been particularly keen users of the service, said Mr Lim. "Some Chinese business people may give away a business card with a Hong Kong number but the phone is actually sitting in China," he said. "The technology has removed all the boundaries."

Mr Lim, however, expects only a gradual move towards phone calls over the internet or VOIP as it is known in the industry.

People still prefer to use the phone rather than a computer and a headset," while issues of call quality and premium service from phone service providers would remain important for business users, he said.

ITU showcase

The latest developments in the industry will be showcased at the ITU Telecom World 2006 exhibition on December 4-8 in Hong Kong.

Among the speakers slated for the event at the brand new Asia World-Expo near Hong Kong International Airport are three chief executives from top telecom equipment makers: John Chambers of Cisco Systems, Patricia Russo of Lucent Technologies and Serge Tchuruk of Alcatel.