ENG-2005 — Page 434

376 | Communications, the Media and Information Technology

After two public consultations, the Government concluded in July 2004 that mandatory Type II interconnection at telephone exchange level

which helped other fixed-line operators enter the market by allowing them access to the PCCW network would be fully withdrawn by June 30, 2008. This revised policy aims to encourage investment in building new infrastructure and upgrading existing infrastructure. In the long run, consumers will benefit from a greater choice of telecommunications services delivered through an advanced telecommunications infrastructure capable of supporting different forms of innovative services.

Since the introduction of competition in the local fixed-line market in 1995, operators have been actively rolling out their self-built customer access networks to provide choices and services to the end customers. By September 2005, networks built by competitors to PCCW-HKT Telephone Limited covered over 71 per cent of households in Hong Kong.

Broadband and Internet Access Services

At year-end, virtually all households and commercial buildings were covered by broadband networks. The number of broadband accounts increased significantly during the year to 1 648 409, or 23.6 broadband accounts per 100 inhabitants, representing an annual increase of 11 per cent. In addition, 65.6 per cent of households had broadband Internet access. Internet Service Providers (ISPs) numbered 186 at year-end. According to reports issued by the International Telecommunication Union (ITU) in 2005, Hong Kong ranks second in the world in terms of broadband penetration (21.3 per cent).

Mobile Phone Services

The market for mobile phone services is highly competitive in Hong Kong. At year-end, six firms were operating a total of 13 digital systems providing second generation (2G) and third generation (3G) mobile services and serving a customer base of over 8 million. This represented an annual growth rate of 4.7 per cent. The penetration rate of mobile phone services was about 122.6 per cent, the second highest in the world.

At year-end, the four 3G operators had acquired a customer base of 635 965. The number of enhanced 2G, commonly known as 2.5G, subscribers increased during the year to 1 212 289. With the introduction of 3G and 2.5G services, new services such as video calls and interactive real-time gaming are now available to mobile phone users.

External Telecommunications Services

Competition in the external telecommunications services market was introduced on January 1, 1999. On January 1, 2000, the external facilities market was also liberalised. An operator that brings in new submarine or overland cables, or uses. non-cable-based means of transmission (primarily satellite) to provide external telecommunications facilities-based service may apply for a licence. At year-end, there were 20 licensees providing cable-based external telecommunications facilities and six providing non-cable-based external telecommunications facilities. Competition in the