To keep pace with the market developments, Hong Kong's Telecommunications Authority has updated the existing universal service arrangements, as of July 1, 2007.

After considering the submissions in response to the consultation paper of "Review of the Regulatory Framework for Universal Service Arrangement" issued on December 28, 2006, the TA has issued a statement to conclude the review. The existing universal service arrangements were put in place in 1998.

PCCW, the only universal service provider, has been compensated under the Universal Service Contribution scheme for the net cost of providing universal service to unprofitable customers. At present, the compensation is shared by telecommunications service providers who provide International Direct Dialling services on the basis of the traffic volume handled.

"The TA agrees with the majority of the respondents to the consultation that the universal service arrangements should be maintained so that affordable basic telephone service will continue to be available to all members of the public," a spokesperson of the Office of the Telecommunications Authority said. "However, the market landscape has undergone massive changes since 1998. Competitors of PCCW have rolled out customer access networks to connect directly their customers. More than 76% of households are accommodated in buildings connected by at least one alternative access network constructed by PCCW’s competitors. PCCW’s competitors are competing with PCCW in these buildings. To be fair to the competitors of PCCW, PCCW should no longer receive subsidy in the form of USC in those buildings connected by alternative access networks."