Press release
                                                                                7 December 1998

HKISPA urges Telecommunications Authority to reject IMS bid on Star

The Hong Kong Internet Service Providers Association opposes the proposed acquisition of the Internet business of Star Internet by Hongkong Telecom IMS.  The proposal is anti-competitive, against the interests of the consumers and contrary to the pro-competition and pro-consumer policy of the Government.  It will also jeopardize Hong Kong's goal to become the communication hub of Asia.

The Association is concerned that competition in the mass Internet market will be adversely affected.  An overwhelming market dominance by IMS will be created, reducing the choice not only for consumers but also for content providers and companies engaged in electronic commerce.  Furthermore, there will be increased dominance of Hongkong Telecom in the Internet backbone market, and the overall power of Hongkong Telecom across the entire telecommunications services market will be further enhanced.

In an OFTA paper to the Economic Services Panel, Provisional Legislative Council on December 29 1997, it was stated that the "TA does not wish to see any particular operator becoming dominant in the market by acquisition of another operator".  It is undeniable that the proposed acquisition if allowed will give IMS and Hongkong Telecom as a group tremendous market power over the entire Information Infrastructure of Hong Kong.  Such market dominance by a single player reduces Hong Kong's overall competitiveness as a telecommunications and Internet hub of the region.

Therefore, in its submission to the TA today in response to the TA's consultation over the proposed deal, the Association strongly urges the TA not to approve the transaction.

Notes to editors:

HKISPA is the only independent and non-profit Internet Service Providers Association in Hong Kong.  Its primary objective is to represent and develop the ISP industry in Hong Kong.  HKISPA has a membership of 51 companies, including local and international companies.

For enquires:
Mr Lee Kheng Joo, Executive Committee Member, 2335-3690, [email protected]