AN estimated three million residents of Housing Authority flats will be receiving STAR-TV free of charge by the end of the year after the authority accepted a STAR give-away worth $110 million. Meanwhile, a proposal from Wharf Cable to wire the 800,000 rental estate and home ownership scheme flats in readiness for its television service has been approved in principle. Subscribers would, however, have to pay the proposed $200 fee to have Wharf's basic 12-channel package delivered. Under the Wharf scheme, worth several hundred million dollars, the company has told the authority it will have all the buildings wired within two years of being granted the licence. Lone pay-TV bidder Wharf is still waiting for the franchise to be granted, but says it is operating as if it has already been given the licence and is on target to meet the on-air October deadline. The offer from STAR to supply and install satellite reception equipment for free was first made last September, followed soon after by the Wharf proposal to wire public housing. Both schemes were considered so there could be no allegations that the authority was promoting competition or was guilty of preferential treatment, the chief buildings services engineer, Mr Tong Wing-shing, said. A STAR-TV spokesman said it made ''good business sense'' to put the offer to the authority, adding that it would bring Hongkong in line with countries such as India and Taiwan. While details of installations are yet to be ironed out, Wharf has targeted estates in Sha Tin as its starting point. Both STAR and Wharf insisted their offers were not driven by competition. The authority said the STAR offer was accepted because it was in line with its policy of enhancing the quality of life of public housing tenants. STAR will install about 700 satellite reception systems at a cost of $110 million. The Housing Authority estimated it would bear maintenance costs for STAR services of about 35 to 60 cents per household each month, and an annual licence fee of $7 per flat. Details of the cable TV package still need to be worked out. A residents' group last night expressed concern that maintenance costs might have to be shared among tenants. A spokeswoman for the Hongkong People's Council on Public Housing Policy, Miss Virginia Ip Chiu-ping, said tenants were largely happy with the new services but they wanted the ''user-to-pay'' principle to apply. ''We believe those who do not subscribe to the cable TV should not have to share the maintenance costs,'' said Miss Ip.