CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE F C O
TELNO 2903
OF 171145Z SEPTEMBER 91
CONFIDENTIAL
REC!
Mr13 121/2
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126511
MDHIAN 3129
MTOP COPY
Q DIST?
MIPT: HONG KONG 'S TELECOMMUNICATIONS AND BROADCASTING POLICIES
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TELECOMMUNICATIONS POLICY IS CURRENTLY UNDER REVIEW IN THE LIGHT OF A CONSULTANTS' REPORT. THE MAIN EXCLUSIVE
TELECOMMUNICATIONS FRANCHISES ARE HELD BY THE HONG KONG TELEPHONE COMPANY (TELCO) AND HONG KONG TELECOM INTERNATIONAL CHKTI). THE TWO COMPANIES ARE BOTH WHOLLY-OWNED SUBSIDIARIES OF HONG KONG TELECOMMUNICATIONS LIMITED. TELCO'S FRANCHISE COVERS THE LOCAL WIRED VOICE TELEPHONE SERVICE AND EXPIRES IN 1995. HKTI'S FRANCHISE COVERS A WIDE RANGE OF INTERNATIONAL SERVICES, INCLUDING THE INTERNATIONAL TELEPHONE SERVICE, AND IS NOT DUE TO EXPIRE UNTIL 2006 (2006).
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IT IS CLEAR THAT HONG KONG'S PUBLIC INTEREST LIES IN THE GREATEST LIBERALISATION POSSIBLE OF ALL SERVICES FOLLOWING THE PATTERN NOW GENERALLY ACCEPTED IN MANY OF THE ADVANCED ECONOMIES, INCLUDING THE U.K. THIS WILL OBTAIN FOR THE PUBLIC THE ADVANTAGES OF COMPETITIVE PRICING AND A WIDER RANGE OF NEW SERVICES AT A TIME WHEN THE COSTS OF PROVIDING SERVICES ARE FALLING RAPIDLY AND TECHNICAL ADVANCES ARE GIVING EVER GREATER SCOPE FOR INNOVATION. AT ITS MEETING ON THE 10 SEPTEMBER, EXCO RECOGNISED THAT PUBLIC PRESSURE TO BREAK HKTI'S FRANCHISE BEFORE 2006 WOULD BE VERY STRONG, BUT AGREED IT WOULD NOT IN PRINCIPLE BE RIGHT TO BREAK IT UNILATERALLY SO LONG AS SERVICE REMAINED GOOD AND PRICES WERE REDUCED INTO LINE WITH ACTUAL COSTS. THE POLICY SHOULD THEREFORE INITIALLY BE AIMED AT:-
(A) A REDUCTION IN INTERNATIONAL CHARGES BOTH IMMEDIATELY AND IN THE FUTURE SO THAT A FAIR PART OF THE BENEFITS OF COST REDUCTION IS PASSED ON TO THE CONSUMER:
AND
(B)
LIBERALISING THE DOMESTIC TELEPHONE SERVICE AFTER TELCO'S FRANCHISE RUNS OUT IN 1995 SO AS TO GIVE A REASONABLE OPPORTUNITY FOR AN ALTERNATIVE NETWORK WITH RIGHT OF INTERCONNECTION TO THE EXISTING NETWORK ON REASONABLE TERMS AND/OR FOR SERVICE PROVIDERS TO ACCESS THE EXISTING NETWORK ON
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