PCCW obtains freedom to set telecom prices
(China Daily)
Updated: 2005-01-14 14:27

PCCW, which has seen its position as Hong Kong's dominant fixed-line phone company eroded by fierce competition, will be free to set prices without first gaining regulatory approval, the government said yesterday.

PCCW said it welcomed the move.

"The elimination of the time consuming and burdensome prior approval process for PCCW tariffs should provide substantial benefits for users and the telecommunications sector," a spokesman said.

Hong Kong opened its fixed-line phone market to competition in the mid 1990s, spawning a new generation of operators including City Telecom (HK) and units of Wharf (Holdings) and Hutchison Whampoa.

While the newcomers were free to set their own prices, PCCW, as the territory's former monopoly carrier, was given a different type of licence subjecting it to heavier oversight when setting its rates.

Since then, the newcomers have steadily nibbled away at PCCW's market share, which analysts have estimated at about 70 per cent, down from 73 per cent at the end of 2003 and 82 per cent at the end of 2002.

PCCW, controlled by tycoon Richard Li, has long complained that the heavy oversight undermines its competitiveness, and that it should be given similar pricing freedom now that its market share is falling.

Yesterday, Hong Kong's Office of the Telecommunications Authority (OFTA) said the new regime will become effective when PCCW accepts the new licence in exchange for its existing licence.

Under the old rules, PCCW must submit its pricing plans to OFTA first, then wait for approval before moving forward - a process that can take weeks or months.

PCCW shares rose 0.52 per cent yesterday to close at HK$4.80.

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