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the statutory regulator. Supported by the Office of the Telecommunications Authority (OFTA), the TA oversees the regulation of the telecommunications industry in Hong Kong and administers the Telecommunication Ordinance and Telephone Ordinance which govern the establishment and operation of all telecommunications services.
Local Fixed Telecommunication Network Services
Voice telephonic services remain very popular in Hong Kong. Hong Kong had 4.5 million telephones served by more than 3.4 million exchange lines at the end of 1996. The telephone density was 70 telephones or 54 exchange lines per 100 population among the highest in the world.
Many data communication services are available in Hong Kong. By the end of 1996, there were more than 307 732 dedicated facsimile lines. The growth rate in 1996 was 0.9 per cent per month.
Upon deregulation of the Fixed Telecommunication Network Service (FTNS) market in July 1995, the three new FTNS operators Hutchison Communications Limited, New T&T Hong Kong Limited and New World Telephone Company Limited gradually introduced services such as overseas call access services to compete with the dominant operator, the Hong Kong Telephone Company Limited (HKTC), while rolling out their networks. During the year, New T&T and New World Telephone separately reached agreement with HKTC to connect with its existing customer access network. In December 1996, the three new FTNS licensees formally established their own initial customer access networks, providing direct connections to local fixed telephone service users.
The local telephone charges of the dominant operator, HKTC, are regulated by a price-capping mechanism which limits any annual increase to four per cent below the prevailing rate of inflation. The existing price-control arrangement will be reviewed in 1998.
The Calling Number Display (CND) service was introduced in December 1996, after a three-month public education campaign which included information on privacy issues. The CND service automatically identifies and displays an incoming call's telephone number. Free CND blocking services are available to all telephone
users.
International Telecommunications Services
Under an exclusive licence which runs until September 2006, Hong Kong Telecom International Limited (HKTI) is responsible for providing certain external circuits and services. These include external public telephone services, facsimile, data and television connections; domestic and international telex and telegram services; international private leased circuits; and shore-to-ship and ground-to-air communications from Hong Kong. HKTI also provides international gateways and operational support for a wide range of value-added telecommunications services such as electronic mail, database access and video-conferencing.
The FTNS operators are interconnected to HKTI's international gateways so that customers may have direct access to a variety of international telecommunications services, regardless of which operator's service they choose.
In April 1996, the TA clarified the scope of HKTI's exclusive licence and formally opened a number of new services for competition. In view of the rapid developments