Step 3:
Open-up the Hong King market for all non-franchised services.
5.19 There are many services in Hong Kong at the moment which are not being provided because of uncertainty as to their franchise status. These would include offerings such as international data and facsimile resale and the domestic provision of
unbundled services such as dark fibre. We advocate an open market for all non- switched voice service providers allowing HKT and HKTI to offer these services on an equal basis to other service providers (see Exhibit 17). This would require HKT and HKTI to unbundle their services and maintain a non-structural separation of their
franchised and unfranchised activities.
Exhibit 17: Example of Complete Liberalisation of All Non-Franchised Services
MARKETPLACE
Intercompany Voice And Data Links
5
Companies Allowed To Buy Capacity From HK Telephone To Sell Value-added Services
Value
added
service provider
(1) on a comparative cost basis
Company B
2) Intra-company
data links
3
HK telephone allowed to compete in all services (1) including value-added
HK Telephone
4) Companies allowed to
purchase unbundled services from HK telephone
5.20 Services such as resale are at best transitory states to a fully liberalised market place, and thus do not have a long-term sustainable cost advantage. However, certain high value-added services not subject to cost-based competition may survive through resale (8). In the absence of full competition, however, the Government should encourage the pursuit of those service segments by signalling to the marketplace their intentions regarding competition in 1995.
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