The first step is to build an intranet that enables users to reach a company's core applications. After a few months, its scope is extended from headquarters to branch offices. Once the extended intranet is up and running, the ultimate step is to let business partners take advantage of it.

'Internal intranet is just a pilot test that paves the way for more ambitious implementations,' Mr Yeung said.

To cope with demand for more regional interconnections, Telecom has boosted the Internet capacity on its trans-Pacific links and will soon add three new China connections to its existing network to Singapore, Japan, Taiwan and Australia.

The target is for Hong Kong to become a prime regional Internet hub.

Interest in implementing intranet has escalated since last year and Mr Yeung expects business to grow this year with most major companies in the territory expected to be running their own intranet before the end of the year.

Messaging will remain the main use, followed by more and more applications. The trend was to input information into webpage format so the same interface was used to access both Internet and intranet facilities.

Mr Yeung predicted that 'more exotic applications' such as multi-media email - voice or even video mail - and instant training would become part of the intranet vision.

'There will be another boom,' he said.

Education is an area offering possibilities. Mr Yeung predicts intranet will be in schools, even kindergartens.