Both proposals will obtain for the Government economic benefits from increased telecommunications competition. However, the degree of economic benefit from competition in telecommunications is more a function of the extent to which Government allows the competition to grow. Earlier studies undertaken in Hong Kong have indicated that the greater the extent and scope of competition, the greater the economic benefit.
The information services industry will be stimulated by a greater range of telecommunications services available at cheaper rates, an objective likely to be supported by market entry by either HCV or HKCC.
However, although both are able to meet the Government's objectives, we believe HCV's proposal is somewhat stronger with respect to the factors examined in our study. In summary:
It presents a programming line-up in the early years which is more likely to achieve the forecasted revenues.
It appears to be based upon a more realistic estimate of the number of cable TV subscribers it can attract.
It presents more detailed implementation plans.
It displays greater understanding of the market for telecommunications services in Hong Kong and of the regulatory environment.
It indicates that HCV will become a more aggressive competitor in the provision of telecommunications services, especially in the early years.
Arthur D Little
21