Hong Kong risks developing a bottleneck in the approvals process for telecommunications tariffs and services as new operators compete with former monopoly Hongkong Telecom to bring innovations to the market place, says Peter Mahoney, chairman of the Hongkong Telecom Users Group (Tug). Mr Mahoney acknowledges the progress made in opening up the mobile and international sectors of the Hong Kong market, but believes there is considerable work to be done in other areas, such as data transmission. ' I believe data services have still got some way to go. I think it is a tariffing issue and we have to talk about the regulator as well. Hongkong Telecom has objected to the time it takes to get service applications through Ofta [the Office of the Telecommunications Authority]. 'The fact is services will be coming out just as quickly as PC packages start appearing on shelves. You have three new fixed-line operators and PCS companies that will want to introduce all sorts of other weird and wonderful services. 'If we are not careful, a huge bottleneck could grow at the regulatory approval level. I am sure Ofta is aware of it but it is something to watch or we could fall into an over-protective space. 'I have seen the telephone company wanting to innovate with services and being told quite clearly that they have to stick to published tariffs. For example, take ATM (Asynchronous Transfer Mode,) which most people say is going to be the core of broadband. Say a doctor's practice wants an ATM service. It would cost a fortune at the moment. If he wants to send off a fine-scanned image through ATM to one of his clients, the current billing method is you pay a monthly rental whether you use it or not.' A charge-per-use basis would enable far more users to take advantage of ATM, but was not allowed under the current tariff structure, Mr Mahoney said. 'The market needs to be given more flexibility in order to innovate products to address different markets. It is not just a Hong Kong issue. We had an international Tug meeting recently and Australia was saying the same thing.' However, Hong Kong could further establish itself as a regional telecommunications centre by being more responsive to flexible tariff proposals. 'I am always looking for something that is going to give Hong Kong an edge over its regional competitors. We (Tug) are trying to be an enabling type of organisation . . . I really think our task is to enable businesses in particular to use telecommunications for regional competitive advantage.' Mr Mahoney is projects controller at the Hong Kong Jockey Club. His most recent project there was installing a new frame relay system linking the club's off-course betting centres. He said the experience bought home to him the difficulties involved in setting up big information technology (IT) systems in the rapidly changing environment. 'We have just put in a huge network here and it has been a very hard project. With all the new technology, the front ends are quite easy, but once you get into serious business applications you inevitably run into a lot of difficulties. 'One of the reasons for this is this marriage between telecommunications with all your different options of servicing, getting to your customers or branches. At the same time, the IT is constantly in a state of flux as is the relevant skill level in Hong Kong. 'The problem is, everything is a moving target. Any service you design, if you choose existing service offerings, they are going to be out of date by the time you have done the development and got it out to the market place.' He had gained the impression that most big IT projects in Hong Kong had run into difficulties, notably TradeLink and the planned multi-vendor Transport SmartCard. 'I suspect the rate and scale of change in the industry is one of the problems,' he said. Outside help is available on telecommunications and related IT projects, but it does not come cheap from industry names such as Lucent and Cogent. Mr Mahoney said there could be a role for Tug in assessing available technologies for business consumers. 'I don't think we would want to go into the full-time business of consulting but there is a gap, particularly as telecommunications has got so much more complex over the last five years.'