SINCE the launch of the first humble pager services, mobile communications products have been a hit with the Hong Kong public. And nothing has proved more tantalising to the average consumer in the territory than the mobile telephone. If the Hong Kong cellular market this year had to be characterised by a single word, it would be 'congested'. This is not a new problem. Both network service providers and government telecommunications regulators have struggled for the past decade to squeeze more users on to the limited available frequency spectrum bandwidth. Great strides were to be made this year in expanding the number of cellular phone users by the issuance of six licences. They would provide mobile services based on the new Personal Communications System (PCS) technology. But these advances were put on hold when the licence-issuing process became entangled in bureaucracy. The Office of the Telecommunications Authority (OFTA) is understood to have already selected the six firms to which it will offer licences following a bidding process which attracted applications from 14 companies. But it has withheld naming the winners pending approval from the Sino-British Joint-Liaison Group (JLG). The licences, which were due to have been issued last August, were viewed as a means of easing the congestion on the four networks' operating systems. A combination of the new PCS technology and the allocation of additional spectrum bandwidth for mobile services would have allowed network operators to double the capacity of the territory's mobile networks. There are currently 600,000 subscribers. Though OFTA appears confident that the licences will, ultimately, be approved by the Chinese side of the JLG, the delay is a big setback for Hong Kong's telecommunications industry. Given the geographical limitations of the territory's size, Hong Kong's mobile networks are among the most efficient in the world in terms of using available spectrum bandwidth. Once the licences have been issued, the new networks will ease congestion. Because PCS operate at higher frequencies than current-generation digital phones, each network will be able to squeeze more subscribers into the same bandwidth. Congestion can cause problems - from being unable to get on the network or getting a line, to having calls drop-out or the signal cut because the network cannot pass a signal due to overcrowding. According to OFTA, demand for mobile telephony services will continue to outstrip supply for the next few years. The good news for consumers is that the six licences being issued will, at least, close the gap between supply and demand and lead to lower prices for handsets and monthly subscription rates. The increased competition generated by the additional networks should encourage the networks to compete more creatively, according to OFTA, and give consumers more choices in services. Ironically, the JLG-delays come at a time when the Government has proved itself best-able to handle the mobile congestion problems. OFTA had foreseen the rapidly crowding networks and prepared in advance to clear the way for new networks by manipulating the way radio frequencies were used - literally clearing the 1.7 GHz to 2 GHz range. Calls for expressions of interest were made well ahead of time to allow for a lengthy selection process, which was completed two months ago. It would appear that OFTA has been taken completely by surprise by the attitude of the JLG. Because the licences straddle the 1997 handover, the JLG has to approve the choices. But, given that OFTA has been assured of its independence in the post-1997 special administrative region, it appears strange that its choice of network operators should come under such scrutiny. Whatever is decided by the JLG must be decided soon. The over-crowded cellular networks are at breaking point.