OF ALL THE background noises in Hong Kong, the most persistent and pervasive must be the bleeps, rings, buzzes and jingles of mobile phones. Just a decade ago in Hong Kong, there were only a million mobile subscribers, equal to the number of people using pagers and far fewer than the 3 million fixed lines to homes and businesses. But by 1999, mobile phone subscriptions overtook fixed lines and last September mobiles went off the scale. Subscriptions exceeded the entire population - with eight million subscribers, theoretically representing 117 per cent. The tally raises many questions. Taken literally, it would mean that every man, woman and child - even babies and toddlers - carry mobiles. Not only that, it would imply that 17 per cent carry two! The bizarre statistic is explained by the inclusion of pre-paid phone cards in the subscription figures. Many prefer paying for calls as they make them, rather than signing up for subscription deals. This confuses the statisticians. But the figure underscores the remarkable revolution Hong Kong's telephone industry has experienced over the past decade since liberalisation of the sector was started by the independent regulator, the Office of the Telecommunications Authority (Ofta). The number of mobile phone owners in Hong Kong is among the highest in the world. With so many choices between constantly discounted rates that seem to change by the day, you have to wonder where it will all end. Is the market too competitive for its own good? Consolidation of the mobile sector seems inevitable, but are the days of the fixed-line operators numbered? Again, the statistics do not tell the whole story. While fixed-line phones appear to have reached saturation point at about 55 per cent of the population, mobiles have a distinct advantage. Mobiles are appliances for individuals, while fixed lines can serve entire households or companies. So while it is apparent that a certain sector of the market, predominantly the younger end, may be dispensing with fixed-line phones altogether, Ofta is convinced landlines will continue to play a vital role. But even the fixed-line sector appears to be overheating as competition intensifies. While there was only one provider under the former monopoly of Hong Kong Telecom (now part of the telecommunications division of PCCW), there are a now five - with incumbent PCCW facing competition from Hutchison Global Communications, New World Telecommunications and Wharf T&T in the urban and commercial centres. As the dominant player, PCCW, not surprisingly, has been under pressure as its market dominance wanes - reflected by a plummeting share price and a series of job layoffs. In 2001, it laid off more than 800 staff, then another 858, which was followed by the voluntary departure of 1,550 employees who became subcontractors for the group in 2002. At the same time, full-time employment in Hong Kong's telecoms sector is down to just under 21,000 - compared to about 35,000 a few years ago. But this figure does not take into account the army of part-timers who market subscriptions on the streets, or for that matter an entirely new sector of subcontractors serving the multitude of mobile and fixed-line operators. Amid the fierce competition, the Consumer Council in the past two years has recorded an increasing number of complaints about telecoms services Director-General of Telecommunications Au Man-ho said the increasing volume of complaints 'may merely reflect the popularity of telecommunications services and frequent transactions on the market'. Mr Au said he believed the entire market was converging. 'With the next generation of broadband wireless access (BWA) technology it will be difficult to differentiate between fixed or mobile phone networks. In a few years it will be capable of providing full mobility services like the existing 3G services,' he said. 'It would then be meaningless to distinguish between fixed/mobile networks when a single access network is connected to both fixed and mobile users.' Convergence will not only be confined to the networks, but will also extend to phones themselves. Some manufacturers have already launched Wi-fi/GSM dual-mode mobile phones that are linked to mobile networks when users are outdoors, but connected to a fixed broadband connection via Wi-fi at home. The same phone, with the same telephone number, becomes a mobile outdoors and a cordless phone at home. 'In due course, fixed and mobile services will cease to be two different types of business,' Mr Au said. Ofta is conducting a 'critical review' of unifying the fixed-line and mobile networks this year - and will examine if mobile operators need to pay interconnection fees for calls connecting fixed lines and mobile lines, as they pay between one mobile network and another. Describing convergence of the two services as 'an emerging trend', Mr Au said, 'What we need is new thinking. 'We cannot simply transplant the models in the traditional networks to the next-generation networks.' But he predicts the discussions will inevitably 'raise a lot of controversies as the interests of operators are at stake'. Hong Kong's ambition to become a telecommunications hub in the region through liberalisation has certainly been a resounding success, but the hapless consumer is destined to remain as bewildered as ever by the sector's technological advances, subscription charges and commercial twists and turns.