private external telecommunications networks (primarily for clients in the service industries such as airline operators, retail banks and brokerage firms)
maritime and aeronautical communication services
internal and external telegram services
telex and external facsimile transmission
external television and radio transmission services.
Although the licensee must operate and maintain the service to the satisfaction of the Telecommunication Authority, there is no equivalent of the Scheme of Control. Increases in tariffs are determined by the company with the approval in writing of the Telecommunications Authority. The licensee operates with the minimum of controls and delays. International revenues (net of payments to other administrations) are shared between HKT and CWHK on an agreed 40:60
basis.
2.1.2 Regulatory institutions
The Postmaster General is the Telecommunications Authority and administers the Telecommunication Ordinance which governs the establishment and operation of telecommunication service. He is also responsible for ensuring that a satisfactory local telephone service is provided under the provisions of the Telephone Ordinance. The Telecommunications Branch of the Post Office is responsible for radio spectrum management, regulatory, advisory and planning functions related to telecommunications. The Branch employs 180 people, but has only two full time and one part time staff dedicated to monitoring and regulating the provision of service, technology changes, tariffs and policies relating to the two companies HKT and CWHK. The Financial Monitoring Unit of the Economic Services Branch undertakes the financial monitoring and the application of the Scheme of Control to the franchised services of HKT (see Exhibits 2.1 and 2.2).
2.2 NETWORK INFRASTRUCTURE FOR FRANCHISED SERVICES
2.2.1 Local environment
The local telecommunications network is provided and operated by the Hong Kong Telephone Company. HKT was incorporated in 1925 to acquire part of the undertaking of 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 for a term of 20 years and as presently stated gives it 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. Several key features create a unique environment that needs to be considered when assessing telecommunication development and particularly when making comparisons with other countries:
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EXHIBIT 2.1. ORGANISATIONAL STRUCTURE OF THE REGULATION OF TELECOMMUNICATIONS SERVICES IN HONG KONG