ON July 1 next year, Hongkong Telecom comes up against its three new competitors in the fixed telecommunications network. The monopoly carrier faces a challenge from Wharf, Hutchison and New World Development. Wharf will prove the greatest challenger because it has already wired up a good part of the territory's homes to its cable system, which can just as easily carry telephone conversations. Will the new boys be able to eat into Hongkong Telecom's profits? Brokerage firm Vickers Ballas thinks not. The reason, it says, is that gaining the critical mass to make a profit is difficult. In Britain, it has taken Mercury 10 years to get 11 per cent of the market. Vickers Ballas also says that Hongkong Telecom's rental charges are already among the cheapest in the world. Of more immediate concern to the utility's profits is a back-door challenge by Canadian telecoms company City Telecom International, which is negotiating with the mainland authorities for market access. It could undercut Hongkong Telecom's prices by 10 to 15 per cent on China calls. But Vickers says Hong Kong Telecom's management team and substantial stakeholder CITIC Pacific should help to crack the China market ahead of its competitors.