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An international tariff benchmarking study commissioned by the Office of the Telecommunications Authority (OFTA) found that residential and business users in Hong Kong pay as low as one-tenth of the telecommunications charges as their counterparts in six other cities under study.
OFTA released today (May 8) the findings of the study, which compares the prices of telecommunications services in Hong Kong with those in Copenhagen, London, New York, Shanghai, Singapore and Tokyo. The consultant commissioned by OFTA surveyed in September 2010 the tariffs of fixed and mobile voice services, fixed and mobile broadband services, leased lines and pay-TV services of the seven cities.
"The survey results show that Hong Kong compares very favourably with the other six cities under study. Residential and business users in Hong Kong generally pay the lowest telecommunications charges and for certain services, the price Hong Kong users pay represents only a fraction of those prevailing in other cities," a spokesman for the OFTA said.
"At a monthly charge of HK$60 for fixed voice service, an average residential user in Hong Kong pays only 8% to 45% of the price paid by a customer in the other six cities. Similarly, at a monthly charge of HK$60 for mobile voice service, an average residential user in Hong Kong pays only 10% to 48% of that of their counterparts in the other six cities," the spokesman said.
"The study also finds that for some businesses in Hong Kong, their telecommunications costs constitute only 12% to 32% of such costs incurred by similar businesses in the other six cities. While our business fixed broadband charges are relatively more expensive, this has been offset by our low fixed voice tariff and competitive charges of the leased lines, thereby contributing to an overall low cost telecommunications environment for the business sector in Hong Kong," the spokesman added.
OFTA commissioned similar studies in 2003, 2005 and 2008. These studies, together with the current one, show that Hong Kong has consistently maintained its position over the years as one of the least expensive markets for telecommunications services.
On top of its competitive telecommunications charges, Hong Kong is also a market leader in terms of its broadband connection and service quality. According to a report published by the Fiber-to-the-Home (FTTH) Council in September 2010, with a household penetration of 34%, Hong Kong ranked third in the coverage of fibre-to-the-home and fibre-to-the-building networks. A study conducted by the University of Oxford in 2010 also revealed that Hong Kong ranked second in the global broadband leadership table, in terms of our throughput, latency, connection's ability to handle specific internet applications and broadband penetration.
"All these demonstrate the success of our pro-competition policy and pro-market approach, with consumers and business users in Hong Kong enjoying quality telecommunications services at affordable prices," the spokesman said.
Background
The benchmarking study was conducted by Teligen Division of Strategy Analytics Limited, a consultant who has established the Organisation for Economic Co-operation and Development (OECD) price benchmarking basket methodology and helped OECD benchmark the telecommunications prices of its member countries since 1995.
The study uses a "basket" methodology to compare the telecommunications and pay-TV charges paid by typical residential households and business entities in the seven cities, including Hong Kong. A "basket" refers to the service or the combination of services which a hypothetical household or business user would use. Prices in the other cities are converted to Hong Kong dollar based on the purchasing power parity adjusted exchange rates. The full study report and the appendix can be downloaded from OFTA's website:
Main report:
www.ofta.gov.hk/en/report-paper-guide/report/rp20110508.pdf
Appendix:
www.ofta.gov.hk/en/report-paper-guide/report/rp20110508_appendix.pdf
The other study mentioned in the press release was conducted by Saïd Business School, the University of Oxford. Using the data from 40 million real-life broadband quality tests conducted in May and June of 2010, the researchers evaluated the broadband quality of 72 countries and 239 cities around the globe. More details about the study are available at www.sbs.ox.ac.uk/newsandevents/news/Pages/globalbroadbandquality.aspx .
The report published by the FTTH Council is available at s.ftthcouncil.org/files/2010_sept_global_ranking_ftth.pdf.
Ends/Sunday, May 8, 2011
Issued at HKT 10:31
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