how HKT, and particularly its subsidiaries, had become more innovative following deregulation within the context of Hong Kong. However when compared with the speed of technological development and product innovation in London, New York and Tokyo, Hong Kong was still a long way behind - services were still designed and packaged primarily for the residential and small business users. The specialist needs of the large business users were not always addressed.
A second separate network
The respondents were interested in a second separate telecommunications network to serve the needs of the business community. Many users anticipated a doubling of their current requirements over the next few years. A second network would open up opportunities of wider choice and variety of products, improved maintenance and lower costs. It would also provide security in diversity, although as HKT quite correctly point out, they too could provide this. The financial and commercial institutions are highly influenced by costs and they wish to see the optimal cost/technology solution for their current requirements. They fear over- investment in a high technology solution such as the Integrated Service Digital Network (ISDN), which cannot be effectively exploited as yet. They would prefer to see competition focus the efforts of the carriers on providing cost effective wider bandwidth and faster data transmission capabilities.
Many users have observed and experienced the benefits of partial competition and now see no reason for not extending deregulation into basic telecommunications. Some respondents fear that service levels may decline but others felt that this would be more than offset by the threat of competition. They all agreed however that the regulatory framework should be reviewed to ensure a correct control over pricing, interconnection, internal payment transfers between regulated and deregulated companies, standards, approvals and restrictive practices.
The two key issued voiced by the majority of users was that their businesses would benefit from the downward pressures on tariffs and there would be a wider range of choice of new products and services.
2.8
FORCES OF CHANGE
This Chapter has described how HKT and CWHK have kept pace with a rapid rate of market growth for telecommunications. They have satisfied their customers with a reasonably priced and good quality service. By all accounts there are few complaints.
Like many countries Hong Kong has liberalized the regulations relating to the supply of CPE and VANS. CPE and VANS are now growing much faster than basic services. The arguments put forward in favour of deregulation, and indeed the results achieved to date, are similar to those in other countries. There has been a proliferation in the range, diversity and enhancements added to new products. Even HKT has favoured and proposed competition for CPE and VANS on the basis that it would:
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