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WEDNESDAY, JUNE 3, 1992
CONSUMERS TO BENEFIT FROM NEW TELEPHONE TARIFF DEAL
THE SECRETARY FOR ECONOMIC SERVICES, MRS ELIZABETH BOSHER, SAID TODAY (WEDNESDAY) THAT THE GOVERNMENT HAS REACHED A BROAD MEASURE OF AGREEMENT WITH THE HONG KONG TELEPHONE COMPANY AND HONG KONG TELECOM INTERNATIONAL ON A NUMBER OF MAJOR REGULATORY ISSUES.
THESE INCLUDE THE BROAD PARAMETERS FOR THE INTRODUCTION OF GREATER LIBERALISATION BOTH AT THE LOCAL AND INTERNATIONAL LEVEL, ARRANGEMENTS FOR THE CONTROL OF LOCAL TARIFFS REPLACING THE FORMER SCHEME OF CONTROL AGREEMENT WHICH HAS LAPSED, AND SUBSTANTIAL REDUCTIONS IN IDD CHARGES.
THE
WINDING UP A MOTION DEBATE ON TELECOMMUNICATIONS POLICY IN LEGISLATIVE COUNCIL, MRS BOSHER SAID IT WAS AT PRESENT THE GOVERNMENT'S WISH ΤΟ
BUILD ON THE BROAD PARAMETERS THAT HAD BEEN AGREED WITH THE HELP OF THE VIEWS OF MEMBERS AND OTHER INTERESTED PARTIES.
ON THE REGULATION OF LOCAL TARIFFS, SHE SAID AGREEMENT HAD BEEN REACHED IN PRINCIPLE FOR LOCAL TELEPHONE CHARGES TO BE HELD AT FOUR PERCENTAGE POINTS BELOW INFLATION FROM 1992/93 TO 1994/95.
UNDER THIS SYSTEM OF INCENTIVE REGULATION KNOWN AS PRICE- CAPPING, CONSUMERS WILL BE ABLE TO ENJOY A REDUCTION IN CHARGES IN REAL TERMS BECAUSE THE WEIGHTED AVERAGE ANNUAL INCREASE OF TELEPHONE SERVICE CHARGES WOULD NOT BE ALLOWED TO EXCEED THE PREVAILING ANNUAL INFLATION RATE MINUS AN "X" PERCENTAGE.
"FOLLOWING DISCUSSION WITH THE COMPANY WE HAVE AGREED IN PRINCIPLE THAT THE LEVEL OF "X" SHOULD BE FIXED AT 4% FOR THE REMAINING THREE YEARS OF ITS EXISTING FRANCHISE, WITH A FURTHER REVIEW IN 1994/95.
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"WE BELIEVE THIS IS A GOOD DEAL FOR CONSUMERS, MRS BOSHER SAID, POINTING OUT THAT THIS SYSTEM WOULD RESULT IN LOCAL TELEPHONE CHARGES RISING BY SOME 1.5 PER CENT PER ANNUM LESS THAN THE HISTORIC TREND.
OVER THE LAST 10 YEARS UNDER THE PREVIOUS SCHEME OF CONTROL, TELEPHONE CHARGES HAD INCREASED AT AN AVERAGE ANNUAL RATE OF CPI(A) MINUS 2.5 PER CENT, SHE POINTED OUT.
THIS SYSTEM WOULD ALSO PROVIDE A REASONABLE DEGREE OF INCENTIVE FOR THE COMPANY TO CONTINUE TO INVEST AND IMPROVE ITS EFFICIENCY OVER THE LIFE OF THE PRICE-CAP, SHE SAID.
"THE
STEP, BUT COMPLETE.
DETERMINATION OF THE VALUE OF X" IS AN THE DETAIL NEEDS TO BE PAINTED IN BEFORE
IMPORTANT FIRST PICTURE IS
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