Sunday 20 May 2012

Contents of module

Payphones

The provision of payphones in Hong Kong takes place in public areas and on private property, such as shopping malls, residential estates and individual shops and restaurants.

The costs of providing public and private payphones will vary, particularly in regard to equipment costs (key to public payphone costs) site rentals (key to private payphone costs). The costs will also vary according to the scope of services they can offer.

For example, New World Telephone (NWT) has installed a multi-media payphone system that is capable of offering e-mail services, Internet, information services and online-onscreen advertising, in addition to the basic telephone service. The costs of providing these additional facilities-based services are higher than providing the basic service alone. NWT payphones interconnect with the dominant carrier, HKTC, to provide customer access to HKTC’s network. After three years HKTC and NWT could not agree on an acceptable basis for cost-based interconnection, and the TA was asked for a determination.

The TA’s Determination, 10 December 1999 identified the following areas of cost and assigned the costs accordingly:

  • the payphone access level programming charge to install a numbering system which provides common access to each fixed network (central downloading: HK$48,819 per request; on site manual programming: HK$201 per payphone),
  • billing system development charge (HK$283,596 shared by 3 operators),
  • payphone common access charge (HK$1.14 per call of 5 minutes – a weighted average between HK$1.33 for public payphones and HK0.88 for private), and
  • interconnection charge upon the usage of the network provided by the payphone operator (local: benchmark set for type I interconnection; external: follow the benchmarks for “A” and “B” routes – see Part Five).

Costs are based upon LRAIC, but the key issue was what to include within acceptable cost.

The TA ruled that only the costs of providing the basic telephone service should be included and the additional costs of providing multi-media value added services should not form part of the interconnection calculations.

Another concern was that site rentals may get artificially inflated to benefit property management companies who have close associations with the telephone operators, and the TA announced he would closely scrutinize cost information against benchmark market rental information.