Hong Kong Telecommunications Plc chief executive Linus Cheung probably overdid things slightly by describing the company’s three competitors in its domestic market as very tough players. It will take quite a long time for their services to have an impact on Hong Kong Telecom’s figures, especially as it only lost its 70-year old monopoly on domestic fixed telephone services on June 30. Interconnection agreements with the three new competitors, which are owned by New World Development Ltd, Wharf (Holdings) Ltd and Hutchison Whampoa Ltd, were not arranged immediately on June 30, so the impact from competition in the six months was muted. Hong Kong Telecom’s interim figures for the period to September 30 failed to excite the markets, but neither did they make them nervous. Net profits were up 15% to the equivalent of $622m, on turnover that rose a shade under 10% to $1,884m. The turnover growth figure and future prospects for growth that concerned some analysts. For instance international call revenues grew by 1.2%, which the company said reflected slower rate of growth in call traffic to and from China, which was up 8%. International traffic grew by 8.6%, compared with 21% in the first half last year. Hong Kong Telecom retains its monopoly on international phone traffic until 2006. Earlier this year the company announced its intention to shed 16%, or 2,500 people, from its workforce by March 1998 (CI No 2,621). So far, the company says, 900 jobs have gone. Cheung said the introduction of interactive multimedia services next July will undoubtedly be a key driver for the future. Cable & Wireless Plc has 57.5% of Hong Kong Telecom.
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