EXHIBIT 12
CHANGE IN BALANCE OF PAYMENTS ON INTERNATIONAL CALLS
VOLUME
Million minutes
1,801
1,734
782
Incoming traffic
811
Outgoing traffic
923
1,019
Before* 2N
After**
2N
1991/92 projected
●
CHANGE IN SETTLEMENT PAYMENTS HK$ millions
Before 2N⭑
$1,369
$5,316
3,947
$5,867
After 2N**
ESTIMATE
$2,022
FO
Balance-of-
payment deficit increases by
HK$654 million or 48%
3,845
Out- payment
In-
payment
Out- payment
In-
payment
Assumes 2N and HKT will offer 20% discount to key customers; takes into account impact of discounts on demand elasticity of incoming calls based on historical relationships between volume and prices of incoming and outgoing calls
Source: Hong Kong Telecom; McKinsey analysis
McKinsey & Company, Inc.
CONFIDENTAL