China Unicom may have to build a code division multiple access (CDMA) network in Hong Kong - estimated to cost as much as US$100 million (HK$780 million) - if the Office of the Telecommunications Authority pulls the plug on the existing CDMA network.

Executive director William Lo said Unicom, the mainland's second largest mobile phone service provider, was prepared to build a CDMA network to keep its roaming services between Hong Kong and China uninterrupted.

The authority is understood to be planning to re-allocate the CDMA radio spectrum to global system for mobile communications (GSM) on falling demand for CDMA services.

At the end of June, Unicom had more than 12 million CDMA subscribers. It has invested heavily in expanding its network on the mainland and by the end of next year expects to have spent more than 70 million yuan (HK$65.4 million).

``Most [mainland] visitors to Hong Kong currently use GSM, but as CDMA subscribers keep rising, it will affect Unicom if Hong Kong doesn't have CDMA,'' Lo said.

Hutchison Global Communications, a unit of Hutchison Whampoa, is the only CDMA network provider in Hong Kong and is used by Unicom for its roaming services.

Telstra's CSL, which controls another less popular time division multiple access (TDMA) network, has said it hopes to convert to GSM but Hutchison said it planned to keep the CDMA service despite criticism from rivals that it was not utilising the network fully because of low subscriber numbers. If the authority decided to swap the spectrum to GSM, it would be a blow for Unicom, the sole CDMA service provider in China.

It has capacity for 35 million users and, on completion of the third phase of upgrades in the first half of next year, will have capacity for 50 million. Many of its subscribers have switched from GSM.

``If nobody runs the CDMA network [in Hong Kong], Unicom will consider becoming its own network service provider depending on licensing conditions,'' Lo said.

An expert on CDMA said that as the cost of equipment had fallen steeply, building a network in only the busy districts of Hong Kong would cost US$20 million to US$30 million. Full coverage of the SAR would cost about US$100 million, he said.

Lo said there was no rush for Unicom to decide whether to develop its own CDMA network in Hong Kong as the authority was unlikely to grant any new second-generation licences until 2006