More than 81% of Hong Kong households enjoy the choice of at least two fixed network operators, showing facility-based market competition has developed successfully, the Office of the Telecommunications Authority says.

The office today said the objectives of introducing the mandatory Type-II interconnection policy in 1995 when the local fixed market was first liberalised have been fully achieved.

Type-II interconnection, a regulatory tool widely used in the world, requires the incumbent fixed network operator to open its copper-based customer access network to new entrants so they can provide competing services to customers in the start-up phase.

After a comprehensive review, the Government announced in July 2004 the mandatory Type-II interconnection policy would be fully withdrawn from July 1, 2008.

Policy a success

In 2004, only 53% of households were provided with two customer access networks. The latest figures show out of Hong Kong's 2.5 million households, 81% have at least two customer access networks while 58% have at least three customer access networks.

This testifies to the policy on facility-based competition's success, and the continual effort made by fixed network operators in investing in the infrastructure, the office said.

According to a recent report published by the FTTH Councils of Asia Pacific, Europe and North America, with a household penetration of 23.4%, Hong Kong ranks second in the world in the penetration of fibre-to-the-home and fibre-to-the-building plus local area networks.

The office said although the mandatory Type-II interconnection policy is fully withdrawn, the fixed network operators can still arrange for Type-II interconnection based on commercial negotiation. The authority will continue to facilitate the network's rollout by fixed network operators.