CONFIDENTIAL
as
Singapore, which is often regarded as Hong Kong's closest competitor for regional telecommunications hubbing for major corporations, appears to be competitive in spite of its significant problems with telecommunications service quality and inadequate responsiveness to customers, noted in the BAH report.
In fact, Singapore's attractiveness to foreign companies stems mainly from its geographic location in a growing sub-region, its good infrastructure, and support from the Singapore Government in the form of tax holidays, skill development grants, and the like.
Hong Kong's excellent telecommunications services and prices have served to enhance Hong Kong's competitive advantage over its neighbours a major international business centre. Any perception of Hong Kong to be losing ground as a regional telecommunications hub is likely to be due to the growing importance of the Southeast Asian market and to concerns about Hong Kong beyond 1997, rather than to inadequate telecommunications infrastructure.
These
concerns would unlikely be assuaged by Government unilaterally breaking established franchise agreements without due cause. Indeed, such a move would be viewed most unfavourably by private investors.
BAH THIRD OPTION TO FURTHER LIBERALISE TELECOMMUNICATIONS
BAH recommends
of
that the Hong Kong Government should restructure and liberalise telecommunications through initiatives such as permitting additional operators local and international telephone services after Hong Kong Telecom's · local and international franchises expire, requiring HKTI to reduce international tariffs by as much as 13%, allowing private circuit bypass and simple data and fax resale, forcing HKT to unbundle its service offerings and to sell dark fibre, and allowing interconnection of PMRS to HKTI. Hong Kong Telecom has fundamental concerns about such recommendations and would welcome an opportunity to discuss the specific elements of each recommendations with Government so that their implications can be fully clarified and assessed.
CONFIDENTIAL
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