ASIA : Hong Kong Broadband Network says it is ready fill a gap in Hong Kong's communications structure and build a CDMA-based third generation (3G) network.

The wholly-owned fixed-line arm of City Telecom says Hong Kong lacks an advanced high-data-speed code division multiple access network and it is ready to spend US$70 million (HK$546 million) to build one.

To enable this to happen, chairman Ricky Wong said the government should take back two little-used 800 megahertz mobile licences - one held by Hutchison Telecom for its CDMAOne mobile voice service, and one by CSL for its TDMA (time division multiple access) service - and auction them off.

Wong's call comes amid fierce wrangling among operators over the future of second-generation licences which expire in 2005-06.

The Office of the Telecommunications Authority (Ofta) has already proposed that the two 800 MHz licences be withdrawn to allow more efficient usage of spectrum resources. Several operators, including HKBN and PCCW, have called for these to be put up for bidding but Hutchison and CSL have opposed any such move.

Wong said his company had begun a feasibility study of a CMDA2000 1x network.

``I am confident that it would take us one year and about US$70 million to have the entire Hong Kong covered,'' he said. ``We urge the government not to put too many eggs in one basket,'' Wong said, referring to the wideband code division multiple access system expected to be used by the four third-generation (3G) mobile licensees. ``It needs to open up to various types of technology that would lead to more competition.''

Both WCMDA and CDMA2000 can offer high speed data and multimedia services such as video phones, video and music-on-demand, live TV broadcasts, video clip downloads and others.

Wong said HKBN, which has a 10-gigabyte fibre network reaching 4,000 buildings, was well-positioned to offer CDMA2000 because back-up from its fixed line network would allow it to lower costs.

``We emphasise that 3G is all about cheap mobile data and multimedia visual services,'' Wong said, adding that GSM operators would need to rebuild and redesign their existing GSM cell sites for the change to WCDMA, adding to their total costs.

``GSM is essentially a voice service,'' Wong said, and using such a network to transmit data was inefficient and expensive. ``This is why data usage in Hong Kong has never been popular,'' Wong said, referring to GPRS (general packet radio service), or the existing 2.5G service which is also based on GSM.

Because 3G based on CDMA had lower establishment costs and could therefore charge less to customers, Wong said his planned CDMA2000 service could support 1 million customers and he was confident it could boost the company's share of revenue earned from data transmission from less than 5 per cent to 20 per cent.

Hutchison plans to launch its 3G service this year while SmarTone, Sunday Communications and CSL, have said they would launch theirs between 2004 and 2005.