3.6.3
iv.
v.
vi.
China traffic is forecast to increase much more rapidly than for the rest of the world. However, as BAH forecasts a fall in the real price of this traffic, the forecast increase in real revenue is much lower than the forecast increase in traffic.
The 'Rest of the World' traffic mix will remain as at present.
BAH is assuming the tariff index as given by CWHK for 1987 followed by a 3% real reduction due to technological developments.
For telex, the outgoing and incoming paid minutes have been converted into revenue at the current tariff and accounting rates. The traffic mix was assumed as at present with tariffs falling in real terms at 3% p.a. For international leased circuits it is assumed that the tariffs also fall in real terms at 3% p.a. These tariffs combined with the growth forecasts provide BAH's view of how the market and revenues will grow under each scenario until the year 2007.
Incremental revenues
The effect of full competition in scenario 5 from 1995 onwards is to raise the call minute growth rate to 10% initially and to 11% from 1996. This results in a one way total international voice revenue approaching HK$5 billion in constant prices by the year 2000. Secondly competition results in a higher volume of total local and international telecommunications traffic of HK$11,500 million in scenario 5 compared with HK$10,800 million in scenario 1 by the year 2000. Of this traffic the second network carries HK$683 million voice traffic or 14% of the total by the year 2000, and HK$809 million including leased circuit traffic, non franchised and business line installations and rentals. This is 7% of the total local and international revenues in the year 2000.
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