STALEMATE STALLS HONG KONG MOBILE PHONE DEVELOPMENT

STALEMATE STALLS HONG KONG MOBILE PHONE DEVELOPMENT

Hong Kong's overcrowded mobile phone sector will remain stuck in a bottleneck until China and Britain agree on issuing new licenses, industry analysts said on Friday.

The result is would-be users are being forced to queue for months to get a phone and existing mobile companies are benefiting from the lack of competition and reaping windfall profits.Hong Kong's Director General of Telecommunications, Alexander Arena, told Reuters on Friday that waiting lists for new cellular phones are growing by 15,000 to 20,000 customers a month due to the hold-up.

"We're starting to get into a position where development is being held back," Mr. Arena said in an interview.

China, which resumes sovereignty of Hong Kong in 1997, wants to vet all agreements straddling the handover.

The award of licenses for six new Personal Communications Service (PCS) networks, phones based on radio-based digital networks, were expected last month.

But nothing came through.

China, through the Sino-British Joint Liaison Group (JLG) responsible for hammering out the details of the handover, wants to be consulted on the new licensees.

But no one, including Mr. Arena, knows how long this process will take. The JLG's agenda is already overloaded.

Hong Kong has prided itself on its efforts to deregulate its telecommunications industry and introduce competition, which it says is one of its drawcards as an international business center.

However, the existing cellular network is increasingly jammed. Some customers complain of strange noises on their phones, interference, busy signals or conversations being cut off.

James Miles, telecom analyst with Asia Equity, said once the new licenses are granted, the licensees would vie for social and recreational users and force down prices of handsets and network charges.

Fourteen multinational consortia have put in bids for the six new licenses.