THE right to make unlimited local phone calls for free is about to be challenged. One option to be suggested by a government consultation paper due out next week is to give consumers a monthly 'budget' of free time, with calls in excess of this total being charged by the minute. Sources say different packages could be tailored for different consumers. For instance, elderly people who want the phone mostly as a reassurance in case of an emergency would be offered a lower monthly rental fee with a lower 'budget' of free minutes. The aim would be to make the average consumer pay about the same as at present and prevent any profits bonanza for Hongkong Telecom. Tony Wong Sik-kei, deputy director of the Office of the Telecommunications Authority, said the system was breaking down because of computer users making very long calls for free. The consultation document will present a series of different charging schemes for local calls for public and industry consultation. Although not prepared to list the options, Mr Wong said the current system was not among them. 'We're not happy with the existing structure,' he said. The cost of residential lines is $65 a month, and there were 1.9 million in service in March last year. There were 990,000 business lines, which cost $98 a month. Fredson Bowers, associate director at Nomura Research Institute Hong Kong, said a 'budget' approach was in keeping with the authority's philosophy and economic efficiency. 'It's the old 'user pays' principle that is accepted in most other areas now as the most ideal way of regulating society,' he said. Hongkong Telecom, which refused to comment on the paper until it is released, said the typical residential phone user spoke for about 30 minutes a day. Next week's paper will also reveal exactly how much it costs Hongkong Telecom to carry a local call. At present, only those who make massive use of their home phone for Internet purposes have to pay a time-based charge, currently nine cents a minute. However, this too is under review. It also does not apply to people running a business from home. Depending on the number of changes to be made, any new charging scheme might need the approval of the Legislative Council, where any pay per-minute scheme is likely to be met with suspicion. The company claims the local network makes a loss and has to be subsidised by international revenue. The current arrangement for Hongkong Telecom's local franchise is a three-year deal due to expire in August, which pegged the company's local rentals to four percentage points below the inflation rate. This formula is also up for review.