Contents of module
- Part Three: PNETS, 'Type I' and 'Type II' Interconnection
- Interconnection index
- eLearning main Index
PNETS
The earliest form of domestic network interconnection in Hong Kong came in 1984 when the Hong Kong Telephone Company (HKTC) established CSL to operate a cellular mobile telephone service, quickly followed by Hutchison, and later Pacific Link, and later still Smartone.
The local fixed wireline flat rate business and residential tariffs were set by the Telephone Ordinance at below cost, being subsidized from international revenues. So Government looked for a licensing mechanism that would be non-exclusive among value-added network service providers and would at the same time pay a usage charge for interconnection with the domestic fixed wireline network.
The public non-exclusive telecommunications service (PNETS) licence was introduced and a PNETS charge for cellular mobile operators was determined by the regulator at HK$0.09 per minute. This was extended to other value added services providers including international value added network service (IVANS) operators, notably Internet service providers and callback service operators.
The problem with PNETS is there remains a fuzzy line between services that require the licence, and commercial services, such as hotel call services and credit card authentication services, that do not. They all offer commercial services by ‘the means of telecommunications’ and they all have a physical presence in Hong Kong, two of the three criteria proposed by the TA in a Statement, 22 March 1995.
The third criterion is that they are not restricted to special groups, which arguably these two examples are. (Mueller1 gives a good account of these problems.) This illustrates the difficulty of trying to create special categories of licences at a time when the use of telecommunications networks, and the offering of special services over them, is becoming universal across all types of commercial activity.
Initially, PNETS charges were not capable of being cost based as there was no data to distinguish between the average call holding time, for example, of a cellphone call and an Internet dial-up.
Most cost incurred by a network is attributable to call set-up so the longer the holding time the lower the average per minute cost of occupancy. Later this data became available from the industry to OFTA, and PNETS charges for VAS including Internet services fell below the charge for cellular operators. See table below.
| Date of PNETS charge |
Line Charge per month |
Usage Charge per minute |
|---|---|---|
| Pre-June 1996 | ||
| Mobile | HK$69 | HK 9.0¢ |
| VAS | HK$69 | HK 9.0¢ |
| June 1996 | ||
| Mobile | HK$78 | HK 6.7¢ |
| VAS | HK$78 | HK 4.2¢ |
| June 1998 | ||
| Mobile | HK$82 | HK 6.4¢ |
| VAS | HK$82 | HK 3.3¢ |
| June 1999 | ||
| Mobile | HK$79 | HK 5.9¢ |
| VAS | HK$79 | HK 2.7¢ |
| June 2000 | ||
| Mobile | HK$79 | HK 5.1¢ |
| VAS | HK$79 | HK 2.3¢ |
| Year of Determination by the TA |
Service | PNETS charge per minute |
|---|---|---|
| Pre-June 1996 | Mobile | HK 9.0¢ |
| VASISP | HK 9.0¢ | |
| June 1996 | Mobile | HK 6.7C |
| VAS | HK 4.2C | |
| May 1998 | Mobile | HK 6.4¢ |
| VASISP | HK 3.3¢ | |
| October 1999 | Mobile | HK 5.9¢ |
| VASISP | HK 2.7¢ | |
| October 2000 | Mobile | HK 5.1¢ |
| VAS | HK 2.3¢ |