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Andrew Chetham

Mandarin Communications, which runs personal communication service (PCS) mobile phone network 'Sunday', says it is not up for sale.

 Industry rumour had suggested the company's shareholders were talking to existing mobile operators with a view to selling out.

 Since its launch last September, Sunday has been linked repeatedly with GSM operator SmarTone.

 'We are not for sale and we are not selling,' Sunday managing director Craig Ehrlich said, denying shareholders had ever been in discussions with SmarTone or anyone else.

 A price tag of up to $4 billion has been linked to the network, but Mr Ehrlich said he had no idea where that came from.

 The consortium behind Mandarin comprises Lai Sun Development with 30 per cent, USI Holdings/Wing Tai with 30 per cent, China Travel Service with 10 per cent and regional cellular operator Distacom with a 20 per cent stake.

 Mr Ehrlich said it had not taken on an investment bank - evidence it was not looking for a buyer.

 Hong Kong is the world's most competitive mobile phone market, with 11 networks and seven operators and six new PCS networks launched last year.

 Most analysts believe Hongkong Telecom's recent $4.8 billion purchase of First Pacific's mobile interests is just the first in a wave of consolidation in the industry.

 SmarTone has pledged it will buy a PCS company. Its philosophy is that the longer it waits, the cheaper the price will become as commercial realities start to bite and shareholders get itchy feet.

 Mr Ehrlich said he could not see how that was the case.

 'In any business, once you have a growing business with revenues coming in, it is likely to be worth more than an empty shell,' he said.

 Sunday has 75,000 paying subscribers. Its promotion offering $88 per month for unlimited time finishes at the end of March.

 A new higher tariff would replace this but it still would be 'aggressive', Mr Ehrlich said.

 Sunday's average monthly revenue per subscriber was low - about $125-$126 - but this was a function of its unlimited usage offer.

 'I think we can obtain $400 revenue per subscriber by the end of 1998,' he said.

 As a result of the promotion, the average Sunday customer is using a massive 900 minutes of air time per month.

 It was the company's deliberate policy to get people used to using their mobile phone as much as possible in the early stages.

 'Clearly this will fall after April 1, but we still believe that our subscribers will be used to high usage. We think they'll drop to around 300-400 minutes usage a month,' Mr Ehrlich said.

 At the end of last year, Hong Kong had about two million cellular subscribers. Most PCS operators forecast the majority of growth this year would be on their networks.

 Mr Ehrlich reckons Hong Kong will have 2.8 million subscribers by the end of the year, with 75 per cent of the new additions going to PCS.



Mandarin dismisses industry rumours Sunday mobile phone network is up for grabs