Hong Kong's extensive cellular coverage is a service often taken for granted, despite mobile phones having been only freely available to consumers for little more than a decade. This has only been possible due to Government-enforced co-operation between mobile-phone operators and the underground-infrastructure owners, the tunnel companies and the Mass Transit Railway Corp (MTRC). However, the mobile-phone industry is now complaining that access to the tunnels and MTR infrastructure is too highly priced. They say their Government-issued operating licences - which required universal coverage throughout Hong Kong - put them at a disadvantage during access talks. This meant they had to take whatever the tunnel companies and the MTR offered. And as a result, calls made within most tunnels actually lose them money, while calls on the MTR are break-even at best, they claim. Jim Pratt, chief executive of Peoples - which gained its licence during the last wave of mobile liberalisation in 1995 - said: 'It was hard to negotiate fair and reasonable deals with the tunnel operators and the MTRC when they know you are required by law to come to an agreement with them. 'In a couple of months time, Hong Kong will be one of the only places in the world where the penetration of mobile telephones will overtake that of the fixed-line telephone,' he said. 'In that regard, we should be treated as a public utility, providing a public service, with the same protected rights to access as the other utility companies get.' To settle the dispute, the Government has proposed - as a clause within the Telecoms Amendment Bill - giving the Office of the Telecommunications Authority (Ofta) powers of arbitration. This means that if, in the future, a mobile operator and a tunnel company cannot agree on a price, either side can appeal to Ofta to intervene. On September 6, a special committee of the Legislative Council will meet to hear both sides present their cases for and against the proposal. Cable & Wireless HKT spokesman Cynthia Leung said: 'What we want is a win-win deal, that's the basis of what we'll talk about. 'It's unreasonable that mobile-phone companies should lose money on provision of mobile services in some areas.' Legislative Councillor Sin Chung-kai, also chairman of the Telecoms Amendment Bill committee, said: 'There are a number of issues entangled in the bill. 'But basically what we're trying to do is move forward with the opening up of the mobile telecoms markets that we began in 1995.' The tunnel operators are almost unanimously against the bill, fearful that giving Ofta arbitration powers would leave them toothless. Mr Sin said: 'The tunnel companies don't want Ofta to have arbitration rights. They're taking in a lot of their revenues from leasing space to mobile-phone operators.' According to Mr Sin, mobile-phone companies say such contracts typically include lump sums covering the cost of building the transmitting stations, revenue-sharing on calls made while inside the tunnel or underground, plus monthly charges covering the rental of ancillaries such as equipment storage rooms. 'Basically, their argument is that tunnel operators are taking in hundreds of thousands of dollars per month from mobile-phone companies. And they're saying that even the same amount of Grade-A office space in Central wouldn't cost that much to lease,' he said. 'But under Clause 14 of the new bill, Ofta would . . . arbitrate these pricing disputes. And that is worrying tunnel and subway companies.' Wharf Transport - operator of the Western Harbour Crossing and original builder-operator of the Cross Harbour Tunnel in Hunghom - questions the rationale of the proposed changes. Director and general manager Frankie Yick Chi-ming said: 'It's not the same as renting property. What we're giving the mobile-phone operators is way-leave rights, or the right to pass spectrum and radio-waves through a confined space. 'It's not just simply the square footage that the base station equipment takes up in the tunnel. And that's not comparable with property rents. 'Basically what the bill is now saying is that tunnel operators' contracts with the Government - which are protected by a Government Ordinance - should be torn up and renegotiated. . 'But these tenders also determine the tolls. So do we want motorists to subsidise the mobile-phone industry now?' Mr Yick asked. Mobile companies argue there is no indication that extra revenue resulted in any benefits to consumers, such as lower tolls. One mobile-phone company executive said: 'The operator of the old Cross Harbour Tunnel raised the licence fees . . . 225 per cent between 1996 to 1997. 'Did they lower tolls? Conversely, look at cellular tariffs over the same period.' Mr Pratt said: 'If I were the Government, I'd be a bit concerned that the tunnel operators need to take advantage of mobile-phone operators in order to make money. 'It builds a bad case for giving the tunnel-management companies the contracts based on their revenue projections.' Another stumbling block is the belief among tunnel operators that Ofta would be biased. 'Why should the telecoms regulator be given power over the tunnel operators? Why not let the Transport Department arbitrate instead?' Mr Yick said. 'By asking for the changes, Ofta seems already to be agreeing with the mobile-phone companies that there is a charge problem. And now it will have arbitration powers over us? That is not right.' Such rhetoric indicates there will be no easy end to the dilemma. Rob Noble, planning director for the MTR, is adamant that any changes made would not be retroactive. 'In most cases, the mobile-phone operators wanted long-term arrangements and that's what they got, between 10 to 15 years long,' Mr Noble said. 'It would be serious if Ofta starts talking about tearing up contracts, and the MTRC would oppose that vigorously,' he said. However, since most tunnels are covered by existing contracts, anything less than the opportunity to renegotiate them would be an empty victory for mobile-phone operators.