February's World Trade Organisation agreement for liberalisation of basic telecommunications services should present substantial market access opportunities for Hong Kong operators, the Trade Development Council (TDC) says in a report.
'Asia is estimated to require an annual investment of US$25 billion in telecommunications well into the next century to keep pace with economic development,' the report says.
'Opportunities for foreign investment are likely to be particularly ample in the mobile phone market.' However, the report seems to ignore evidence from several countries in Asia where many of the most attractive mobile franchises have been handed out and a resultant dramatic rise in cellular capacity is causing biting competitive pressures and narrowing of profit margins.
'Despite significant increases in subscriber numbers, the industry over the next four years is likely to go through an extremely difficult and uncertain period,' Deutsche Morgan Grenfell said in a research document on the sector in Asia.
Investors appear to have recognised this and the share prices of cellular stocks across Asia have performed poorly against their respective markets.
The TDC report said that while Hong Kong, Singapore, Japan and Australia were at the forefront of the telecommunications revolution, Asia in general was severely underdeveloped in the sector.
The WTO agreement should make developing countries more attractive to potential investors by ensuring a more transparent regulatory framework, it said.