The opening of Hong Kong’s domestic fixed line telecommunications services to competition has had some strange outcomes. The main one being a price war over international calls – which were supposed to remain the preserve of the previous fixed-line monopoly operator Hongkong Telecom until 2006.
Our briefing paper examines the regulatory background behind the emergence of competition in Hong Kong and how this has moved from domestic to international services. The first part, on the regulatory environment in Hong Kong, looks first at exclusive services – ones to which entry is restricted to a fixed number of companies granted licences to operate for a fixed period – then at Hong Kong Telecom International – the arm of Hongkong Telecom that supposedly has a monopoly over international calls until 2006 – and finally at non-exclusive serifs – ones that are open to other entrants.
The second part examines how the new operators have managed to establish themselves as international telecom service providers through an examination of the principles underlying charges between Hong Kong Telecom and the new operators.