The Office of the Telecommunications Authority (Ofta) is considering issuing a fifth third-generation licence, proposing technical requirements that mean the winning bidder must implement CDMA 2000.

In its consultation paper on the matter, Ofta points to high rates of data take-up in South Korea and Japan, which have implemented the technology.

Industry analysts, however, say the success of data services such as mobile gaming, multimedia messaging and entertainment in these markets is based on other factors.

One was the close co-operation between handset manufacturers in South Korea and Japan and mobile-phone operators, said IDC analyst Davina Yeo.

Because handsets of varying screen sizes and technical specifications complicate how data is delivered, mobile operators in Japan and South Korea work closely with manufacturers to ensure phones are uniformly developed.

Hong Kong, however, does not have a handset industry to aid development.

Andrew Low, managing director of Onda Concepts (which sources content supplied by third parties), said Hong Kong operators preferred to develop applications in-house rather than partnering with a provider. "They are very risk-averse in terms of protecting their bottom line," he said.

But when an operator does work with a content provider, it sometimes takes as much as 50 per cent of any revenue generated, making it hard for developers to survive.

By comparison, South Korean operators charge a maximum 10 per cent commission for premium content. In Japan, operators take only about 10 per cent for "official" or approved sites, and do not charge at all for unofficial sites.

The benefits to the content developers are clear. Cybird, one of Japan's largest content developers, earned US$16 million last year.

PA Consulting, the research house hired by Hutchison Telecommunications to oppose Ofta's proposal, said the Hong Kong data market was too small and too young.

"Current revenue sharing arrangements are insufficient in the short term to incentivise the development of a wide range of new high-quality content," it said in response to Ofta's consultation.

Nonetheless, the group said a change in revenue-sharing arrangements might not be sufficient to kick-start the development of applications in Hong Kong.

PA Consulting researcher Jeremy Godfrey said content providers and network operators should form a forum focusing on the development of new services. He noted that Singapore was already promoting collaborative projects.

Mr Low said the government should offer more help to independent content providers. For example, it could help with testing systems and provide a platform for developers to access operators.

He said that at present much of his time was taken up with negotiating content agreements with the operators, a situation that would be made worse if a fifth 3G player entered the market.

Bosco Cheung, chief executive of Hong Kong mobile application developer Touch Softworks, said a market with multiple operators , far from providing more choices, was tougher for a content developer than one dominated by a small number of large players.

In Japan, a small content provider could survive by signing an exclusive deal with just one of the large players.

IDC's Ms Yeo said countries such as Japan and South Korea offered huge domestic markets to support a thriving application community. In addition, handset vendors were willing to customise phones to the specifications of each carrier. This, not CDMA 2000 technology, had given them a head start in introducing data services.