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HONG KONG'S personal communication service (PCS) mobile revolution, which promises to drastically cut the costs of using a cellular phone, gets under way this week with the launch of the first of six new operators.

   People's Telephone Company will begin offering services from Tuesday.

   Its unique selling point is that it will be the first mobile operator in Hong Kong to ditch the monthly tariff plan in favour of a 'pay for the minutes you use' system.

   It hopes to tap the huge mass of people who have never been inclined to use a mobile phone.

   Indeed People's pricing structure means it has no choice: it has to attract large numbers of customers.

   However, there has been little publicity in advance of the start of services, signalling that the company intends to keep this very much a 'soft launch'.

   With only a few months to build up its infrastructure since the award of the PCS licences, the company will be keen not to make the mistake of encouraging large numbers of subscribers before its network is ready to handle them.

  Despite that, the other operators will be scrutinising People's early progress for ways they can gain advantage.

  People's plans a straight-forward fixed fee of $1 a minute.

   Thus a customer who talks for five minutes a month will pay just $5, although there will be strings attached such as higher handset costs (in excess of $3,000) and a one-off charge of $600 for the first month, which entitles the user to 600 free minutes of talking time.

  A recent UBS report speculated that People's Phone would either be the runaway market leader or a spectacular failure.

  UBS concluded that the influence of the Unisource consortium of Nordic companies, which owns 22 per cent of Peoples, was evident in the company's innovative pricing plans. Nordic countries are seeing mobile phone use move rapidly into the mass-market phase.

    People's controlling shareholder is mainland-backed China Resources with 54.5 per cent.

  By the end of the summer all the six new PCS networks will be up and running.

   A senior figure in the Hong Kong telecommunications industry said privately last week that he thought it obvious that one or two of the different consortiums were not really serious about the business.

   Rather, he said, they were simply looking to make a quick profit by selling the licence on to other companies when they could.

  Another highly placed member of a different consortium said he did not expect to make much money in Hong Kong because the market was over-crowded.

   However, the experience and the lessons learned in marketing and technology in Hong Kong would give them skills to go to other markets in the region and look for richer pickings, he said.



Talk and pay firm begins mobile phone revolution