the China and Japan Telephone and Electric Company Limited, and was granted a concession to provide all Hong Kong's domestic telephone services. The HKT franchise was renewed on 1st July 1975, conferring the sole right to operate the public telephone service until 1995. Formally this covers voice telephony plus related public services like payphones and the de facto basic network infrastructure. The Company services the Hong Kong population of 5.7 million in an area of 1070 square kilometres.
7.
Several key features create a unique environment that needs to be considered when assessing telecommunication development and particularly when making comparisons with other countries:
8.
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Hong Kong is one of the most densely populated territories in the world, with an average metropolitan population density of 20,811 people per square kilometre in Hong Kong Island, Kowloon, New Kowloon and Tsuen Wan.
Much of the land is hilly and unsuitable for development, confining the urban areas to the coastal strip, the foothills and the six new towns in the New Territories. The urban areas are characterized by high rise flats and multi-storey factories and offices in high rise buildings.
The working and residential population are highly communications oriented. Virtually all residences (over 94%) have a telephone service and the tradition of free local calls has created a telecommunications "culture" unique to Hong Kong.
International telecommunications are provided under an exclusive licence granted by the Governor in Council to Cable & Wireless Hong Kong (CWHK), under the Telecommunication Ordinance. The licence, granted in October 1981, runs until 2006.
9.
The local telecommunications network operated by the Hong Kong Telephone Company (HKT) provides, by international standards, a high quality of service at low tariffs. The telephone network serves 94% of households; installation requests are usually met within several days; and the price of a residential/business telephone line is HK$43/66 (US$5.51/8.46) per month, with unlimited free local calling. An acceptable range of advanced data services is available to the business community. International service of a high quality is available, though tariffs following international practice are much higher than the costs of provision.
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10.
The prospects for future growth in demand are excellent. Total revenues are expected to grow, in real terms, by 190% in the next decade (to 1997) and by 280% over the next two decades (to 2007). Volumes will increase by much larger multiples than this; the revenue growth forecasts reflect a rate of cost decline of 3-4% per year, in real terms, throughout the period. Growth in residential demand will, however be very modest (except for international service).
11.
Like many countries Hong Kong began to introduce competition into the telecommunications sector, by liberalizing the regulations
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