Study finds Hong Kong a competitive telecommunications market

Hong Kong is a leading market in terms of effectiveness of competition in telecommunications, a new report has found.

The report, commissioned by the Office of the Telecommunications Authority (OFTA), compared telecommunications markets in Hong Kong, Australia, Japan, Singapore, South Korea, Sweden, the UK and the US.

The scope of the study included the local fixed voice sector, mobile sector, data access sector (such as broadband services) and international services sector.

It focuses on four key competition issues, including the competition environment and regulatory framework, development and effectiveness of competition, consumer benefits derived from competition, and industry investment.

The study, the first international benchmarking exercise on market competition commissioned by OFTA, showed that Hong Kong had the most competitive mobile sector of the seven markets reviewed.

"In the local fixed voice sector and the international services sector, new entrants have gained a significant increase in market share during the past few years," an OFTA spokesman said today (June20).

"This is the result of our liberalisation policy and pro-competition regulations, such as Type II interconnection, mobile number portability and a new licensing framework of mobile virtual network operators," he said.

Consumers have derived substantial benefits in cost savings. From 1996-2002, the cumulative savings resulting from competition in the mobile market are estimated to be HK$70 billion. Savings from IDD call rates between 1999 and 2001 are estimated at HK$31 billion.

Hong Kong has the highest mobile penetration rate and the second highest broadband penetration rate after South Korea.

Hong Kong is also one of the least expensive markets for telecommunications services.

The study showed that the cumulative investment per capita in telecommunications from 1991-2001 was around $14,000, which was higher than five other reviewed markets. Hong Kong was similar to the UK and second to Japan.

The spokesman said that with substantial investment, operators had been able to deploy advanced networks and deliver innovative products and services to end-users.

The full report can be downloaded from the OFTA's website at http://www.ofta.gov.hk/.

End/Friday, June 20, 2003