4.
These three sectors account for almost 50% of Hong Kong's GDP and are seen as the driving force for the future of Hong Kong as it moves from a manufacturing oriented economy towards a service oriented technology and high value added economy.
Many business users in Japan, the United States and United Kingdom when interviewed on the impact of deregulation have commented on the improved technology and features now available [4].
Almost all major users of telecommunications can quote examples of actual and anticipated gains in productivity and efficiency as a result of liberalization. Dealers in financial institutions have reported faster and more reliable foreign exchange transactions resulting in a better service to the clients. Others have emphasized the speed and confidentiality achievable with encrypted signals transmitted over newly available, end-to-end digital transmission systems.
Hong Kong is already a major player in world telecommunications. It is among the largest users of communications facilities exceeding, for example, Spain, Italy and several other industrial nations in its use of Intelsat space facilities. Hong Kong's favourable geographic location provides a bridge in the time gap between North America, Europe and the Pacific rim countries. Hong Kong has enormous opportunities to exploit
as:
one of the world's leading international trading centres
a regional financial centre between London, Tokyo and New York
a gateway to China.
To maximize these opportunities and the performance of its industries, Hong Kong needs to keep pace with the latest technological advances and to retain its competitive position relative to other regional centres such as Singapore.
In the case of Hong Kong, the feature of the telecommunications environment which is potentially most damaging to the macroeconomy is the high price of international telecommunications services. Competition in international telecommunications has been introduced in the world's three largest financial trading centres, the United States, United Kingdom and Japan; this will put increasing downward pressure on international tariffs. Hong Kong must match this trend if it is to flourish as a major financial hub.
in Hong
The high price of international telecommunications services Kong as elsewhere is not only a consequence of monopoly supply, but is also a result of cross subsidising local services. We consider the interrelationship between the cross subsidy and competition in 5.6 below.
For more details see "The transition to telecommunications competition: Japan, the United States and the United Kingdom", Michael Tyler, Charles Jonscher and Tom Watts. Lexington, Mass: Lexington Books, 1988.
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