HONEYCOMB Telecommunications, a consortium led by Hysan Development Co, will spend HK$2.3 billion on its planned personal communications service network (PCS) if it wins a licence. It is one of 14 groups bidding for the six licences. Other bidders include four existing suppliers of cellular telephone services - Hongkong Telecom CSL, Hutchison Telecom, Pacific Telelink and Smartone. Hysan chairman Lee Hon-chiu said the group had made a momentous decision to enter into the telecommunications business. The planned investment was a significant departure from Hysan's property investment portfolio. 'We have a vision that telecommunications will be one of the fastest growing industries in the next century,' said Mr Lee, who is also chairman of Honeycomb. The consortium is 30 per cent owned by Hysan, 33 per cent by Danish firm Tele Danmark, and 13.5 per cent by Norwegian firm Telenor. China Unicom, the mainland's second telecommunications operator, is the remaining shareholder with a 23.5 per cent interest. Unicom is a state-owned corporation approved by the State Council with 16 shareholders. 'The participation of China Unicom will benefit our possible investment plans into mainland China,' Mr Lee said. The consortium said it planned to offer a simple service package to customers and a wider range of advanced services through an add-on support system. Honeycomb project director Ole Thorndal said: 'Honeycomb will provide the services at a discount of 30 per cent to 40 per cent on the prices of the existing market.' He said DCS 1800 technology would be used - a derivation of the European digital mobile telephone standard. He said the company predicted about 45 per cent of the population would carry mobile telephones in about 10 years, and Honeycomb was confident it would achieve 10 per cent of the market share. The project would be 40 per cent financed by shareholder funds and 60 per cent from external financing. The initial set-up cost of Honeycomb's PCS system would be just over HK$1 billion while the projected total investment was about $2.3 billion, Mr Lee said. He expected the investment would break even in about three years and said the network would be ready for commercial services within eight to nine months from the granting of the licence. Mr Lee said the project was aimed at generating more stable recurrent income in the long term. 'We are considering other good opportunities to diversify our business in a move to improve our earnings,' he said. Mr Lee said Hysan would continue to concentrate on its core business, and was interested in bidding for property developments above the future Central station on the new airport railway line. He said some of the proceeds raised from the recent US$175 million convertible bond issue would be used for future expansion in the real estate market.