XN000022-1981-03-11 — Page 2

WEDNESDAY, MARCH 11, 1981

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TELEPHONE CHARGE INCREASE APPROVED

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THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY) APPROVED A GENERAL INCREASE IN THE HONG KONG TELEPHONE COMPANY'S SCHEDULED CHARGES,

THE INCREASES WERE FOR EXCHANGE LINE INSTALLATIONS, EXCHANGE CONNECTED INTERCOMMUNICATION SYSTEMS, PRIVATE BRANCH EXCHANGES AND ASSOCIATED EQUIPMENT, NON-STANDARD INSTRUMENTS AND MISCELLANEOUS APPARATUS, THE HARBOURPHONE RADIO SERVICE, AND MISCELLANEOUS CHARGES.

THE NEW SCHEDULE OF CHARGES WILL COME INTO EFFECT ON APRIL 1.

IN MOVING THE MOTION THAT THE TELEPHONE ORDINANCE BE AMENDED, THE ACTING SECRETARY FOR ECONOMIC SERVICES, THE HON N.M. TAYLOR SAID THE NEW CHARGES WERE THE RESULT OF THE INCREASE IN THE COMPANY'S OPERATING COSTS, ESPECIALLY THE COST OF LABOUR AND MATERIALS INVOLVED, SINCE THE LAST GENERAL TARIFF REVIEW IN JULY 1978.

HE SAID THE COMPANY PROPOSED A RATIONALISED TARIFF STRUCTURE LAST YEAR FOR LEASED LINES AND EXTERNAL EXTENSIONS. IT POSTPONED ITS APPLICATION FOR AN INCREASE IN EXCHANGE LINE RENTALS BECAUSE OF ITS INCREASED SHARE OF REVENUE FROM INTERNATIONAL TELEPHONE CALLS.

*WE HAVE CAREFULLY EXAMINED THE RELEVANT ACCOUNTS AND FORECASTS OF THE TELEPHONE COMPANY AND ARE SATISFIED THAT THE PROPOSED INCREASES IN CHARGES ARE COMPATIBLE WITH THE COMPANY'S SCHEME OF CONTROL AND ARE NECESSARY TO ENABLE THE COMPANY TO CONTINUE TO IMPLEMENT ITS PLANS TO MEET THE PROJECTED GROWTH IN DEMAND, SAID MR TAYLOR.

+HOWEVER, THE FORECAST OF THE COMPANY'S PERFORMANCE DURING 1981, EVEN INCLUDING THE INCREASED CHARGES PROPOSED IN THE RESOLUTION, INDICATES THAT A FURTHER INCREASE (POSSIBLY RESTRICTED TO LINE RENTALS AND RELATED CHARGES) MAY BE NECESSARY LATE IN 1981 OR EARLY 1982.+

MR TAYLOR SAID THE $100 INCREASE IN INSTALLATION CHARGES WAS THE SAME CHARGE WHICH THE LEGISLATIVE COUNCIL APPROVED IN 1970, BUT WAS SUBSEQUENTLY REDUCED ON THE RECOMMENDATION OF THE 1975 COMMISSION OF INQUIRY INTO THE HONG KONG TELEPHONE COMPANY, IN ORDER TO STIMULATE DEMAND.

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