The managing director of Distacom, the operations partner of Hong Kong-based mobile telecommunications consortium Mandarin Communications, says the PCS network era will push mobile phone services out of the electronics shopfront and into consumer retailing. Rick Siemens is deputy chairman of Mandarin, a joint venture aimed at serving the mobile telephone markets it calls the Three Chinas - Hong Kong, China and Taiwan. Hong Kong is Mandarin's first site for licence approval. Final negotiations with regulator Office of the Telecommunications Authority (Ofta) have concluded and licences for the six firms approved to conduct personal communications services networks by the Executive Council and the Joint Liaison Group will be formally issued next month. Distacom is participating in global system for mobile (GSM) phones and paging networks with joint venture partners such as Telstra, Hutchison and Motorola in India. The firm also holds a 10 per cent stake in the Tokyo Digital Phone PCS network in Japan. Distacom's Mandarin partners are Lai Sun and Singapore's USI Holdings, which collectively own 60 per cent of the new firm, as well as China Travel Service (Holdings) Hong Kong, which shares a 20 per cent stake with Hong Kong Parkview Group. Distacom holds the remaining 20 per cent. Mr Siemens predicted that PCS networks in Hong Kong would open up a whole field of mobile services, from the 'low-ball to the innovative and those augmenting GSM services'. 'We think that in the future you'll go into a retail operation and buy a phone,' he said. 'They will be coming out of the electronics shops into the consumer field. Our partners understand the retailing business in Hong Kong.' Lai Sun operates the Crocodile clothing chain. Distacom was formed more than 30 years ago as a Canadian radio service outfit and is now based in Hong Kong, where it uses its office space to form task-forces and bidding consortiums for licences in the Asia telecommunications market. Distacom believes PCS is well positioned to cover the entire range of mobile wireless devices, more so than any other wireless device, whether it be cellular, mobile satellite-based services or cordless access services such as DECT or PHS. Mr Siemens said his firm had held talks with property giant Sun Hung Kai and local telecoms newcomer New T & T in preparation for PCS application procedure before meeting with the current Mandarin partners. 'They were too much interested in treating me as an employee rather than a partner,' he said of Sun Hung Kai and New T&T. 'They didn't fully understand the licencsing process and they were two of the eight that failed to win a licence.' Of Hongkong Telecom and SmarTone, Mr Siemens said they had misinterpreted Ofta's stance on the spirit of competition in mobile telephony. 'The people not accommodating the competitive element that the Government wanted in this PCS network licensing just missed out,' Mr Siemens said. He said that in June of last year, when Ofta called for revised bids to the PCS licensing process, he suspected all four of the existing mobile operators had failed to meet the competitive criteria set by Ofta. 'Two of the guys did wake up to what changes had to be made and two guys were blind,' Mr Siemens said. Hong Kong's quick acceptance of new products and technology would assure PCS handsets of an early adoption as it had done in Japan, he said. 'The PCS operators in Japan were able to tear through the market place, capturing far more subscribers than was initially suggested.' 'It's a bit like a phonograph compared to a CD player. Why would you buy an old one. 'The normal customer won't take an old handset for an older service when presented with a choice of handsets that look exactly the same and are priced almost exactly the same.' Mr Siemens described GSM as a stepping stone technology much as analogue had been a stepping stone to digital. Analogue handset numbers in Hong have dwindled in the past two years to represent less than 9 per cent of the market, which has grown to almost one million. The Distacom chairman said the delay in the JLG endorsement of PCS allowed Hutchison to become stronger on its digital network and catch up with the other operators in terms of coverage and services.