Hong Kong's third-generation (3G) cellular-phone licence auction will raise less per head of population than those in Britain and Germany due to the more competitive market in the SAR. 'I do not expect the bidding to be as nearly as expensive as what we have seen in Europe,' said Morgan Stanley Dean Witter Asia telecoms analyst Mark Shuper. Licence winners are required to provide capacity to competitors without a licence. 'It makes the market more competitive so that will probably lower the price that you would be willing to pay up front for a licence,' Mr Shuper said. The high bidding for 3G licences came after the British auction in April raised GBP22.5 billion (about HK$253.1 billion), or about GBP384 per head of population. Telecom shares suffered due to concerns about the high licence costs. Mr Shuper, however, thinks Asian counters are trading close to their troughs. 'I think a lot of that decline is already priced into the stocks' but shares may trade in their present range for two more quarters. He expects consolidation in the Hong Kong cellular industry will see the number of mobile-phone operators falling to four within a year or two. Meanwhile, Morgan Stanley regional Internet analyst Sunil Gupta expects Asian Internet companies to reap a net revenue of US$34 billion by 2004. Internet infrastructure companies are expected to harvest 64 per cent, Internet consulting 20 per cent, consumer sites 10 per cent and business-to-business firms 6 per cent.