ENG-2002 — Page 440

COMMUNICATIONS, THE MEDIA AND INFORMATION TECHNOLOGY

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Council in May 2002. The bill would promote fair and effective competition in the market and facilitate businesses to make informed decisions on mergers and acquisitions.

Local Fixed Telecommunications Network Services

Businesses and consumers in Hong Kong enjoy an excellent telecommunications infrastructure. Hong Kong had 4.8 million telephones served by more than 3.8 million exchange lines at year-end. The telephone density was 70 telephones or 56 exchange lines per 100 population — one of the highest in the world. Also serving Hong Kong's needs in data communications were more than 546 330 dedicated facsimile lines.

To implement the Government's policy to fully liberalise the local fixed network market as from January 2003, the TA announced in January 2002 the implementation details and issued guidelines on inviting applications for licences. Under the full liberalisation policy, there would not be any pre-set limit on the number of licences to be issued, nor on timing for submission of applications. By year-end, there were altogether nine local fixed telecommunications network services (FTNS) operators, all of which were capable of providing broadband networks and services. They included four local wireline-based FTNS operators, four local wireless-based FTNS operators, and the cable television operator which provides telecommunications services over its hybrid fibre coaxial network. One new FTNS licence had become effective, as of January 1, 2003. Two incumbent local FTNS operators also had their licences modified to provide local service through the wireline-based FTNS network.

Broadband and Internet Access Services

By the end of the year, virtually all households and commercial buildings were covered by the broadband network. The number of broadband accounts increased significantly during the year to 989 115 or 14 broadband accounts per 100 inhabitants, representing an annual increase of 59 per cent. In addition, 42 per cent of households had broadband Internet access. The number of registered customer accounts with dial-up access was 1 371 705, or 20 dial-up access accounts per 100 inhabitants. Internet Service Providers (ISPs) numbered 236 at year-end.

After two rounds of consultation, the Government issued in November 2000 a statement stipulating the regulatory framework for broadband interconnection. The regulatory framework promotes effective competition and consumer choice at affordable prices, maintains a fair and competitive market environment, and promotes investment in broadband infrastructure underpinning the service sector. The TA is in the process of determining the terms and conditions for Type II broadband interconnection in Hong Kong.

Public Mobile Phone Service

The market for public mobile phone services is highly competitive in Hong Kong. At year-end, six firms were operating a total of 11 digital systems, serving a customer base of over 6.2 million. This represented an annual growth rate of 10 per cent. The penetration rate of public mobile phone services was about 91 per cent, one of the highest in the world. The International Telecommunication Union report entitled 'Internet in a Mobile Generation' released in September 2002 ranked Hong Kong as the No. 1 economy in the world in terms of performance in mobile and Internet technologies.