The Government has said it would complete its review of applications for external facilities licences by the end of the year.

United States-based AT&T and British Telecom were among the 33 other companies that also applied yesterday to the Government for the licences that would enable them to bypass HKT's international gateway and facilities for long-distance telephone calls.

The Government has not indicated how many, if any, licences it would issue.

CLP Telecom's proposed gateway would enable it to re-sell voice and Internet traffic between the SAR and the mainland to other operators.

If the company is awarded a licence, it could mount a serious challenge to HKT, as cross-border traffic is a large source of its revenue.

CLP said it would install fibre-optic cable between the SAR and the mainland by wrapping it around CLP Holdings' power lines.

The company has yet to disclose the projected cost of the proposed project.

CLP Holdings has a 1.8 million kilometre wire network that covers almost 80 per cent of Hong Kong and extends into the mainland.

The company also has a limited fibre-optic network, according to a recent ABN Amro report.

'It's a good use of an asset they already have,' said ABN Amro telecommunications analyst Joe Locke.

'They can build the fibre [cable] on to [existing power lines], and fibre is dirt-cheap.' Further, Mr Locke said CLP Holding's move into the telecommunications sector was a relatively low risk, inexpensive way to diversify.

CLP Holdings has long been looking at other revenue-earning vehicles because of Hong Kong's maturing electricity sector.

'I don't think it's going to be huge profit for the company,' Mr Locke said.

'But I think it can help with their incremental revenue.' The SAR's long-distance operators presently pay HKT origination fees for outgoing calls and termination fees for incoming calls.

The carriers and HKT share the accounting revenue for the calls.

The calls, plus gateway revenue, bring in about $4 billion for HKT.

Cross-border traffic accounts for about half of HKT's international direct dial traffic. HKT will lose its exclusive international gateway licence on January 1.

From that date, new external facilities licence holders would be able to carry international calls on their own networks. These companies will also be able to collect origination and termination fees.

'What this does is it increases capacity for long-distance calls [on the China route], and it can reduce prices,' Mr Locke said.

'It certainly increases supply.' CLP did not rule out partnering with another operators to generate call traffic.

'Unless they want to offer their own service, it might just be easy for someone else to build their own gateway and lease the traffic themselves,' Mr Locke said.

City Telecom, the SAR's biggest international call re-seller, applied yesterday to operate its own international gateway, using satellite technology.