Hong Kong is fast becoming a regional telecoms hub, despite the city's relatively small size.

The region's position on the edge of China, and fairly open government and economy, are making it an increasingly attractive target for telecoms service wholesalers, according to Ovum analyst Kevin Lee. 

"Apart from [Hong Kong's] PCCW, a number of international service wholesale providers have emerged to offer wholesale bandwidth, international voice resale and wholesale mobile data services," he said. 

The wholesale telecoms service market is also being fed by changes such as the deregulation of local loop unbundling, VoIP liberalisation and the licensing of new technologies like mobile TV and WiMax.

"Service-based, rather than infrastructure-based, carriers are likely to develop more quickly due to the fierce competition and the incumbent's dominance of the last mile," said the analyst.

"International wholesale still provides enormous room to grow in light of the booming Chinese economy and increasing foreign business relations in China.

"With prices starting to rise, wholesale revenues will grow in the near term as will profits if costs can be kept under control."

In related news, leading Chinese ISP China Netcom announced yesterday that it will cooperate with PCCW to build the first high-bandwidth commercial international Ethernet private line linking Hong Kong and Beijing.

PCCW also announced new interconnection deals this month with connectivity providers in India and the Middle East.