Under the new policy, the government will require Wharf Cable, the sole pay-TV provider in Hong Kong, to open its broadband network to other television and telecoms providers.

Hong Kong's four Fixed Telecommunication Network Services (FTNS) licensees will be able to carry television services, including pay television and video-on-demand services.

The licensees are Hongkong Telecom, Hutchison Whampoa Ltd's Hutchison Communications Ltd, New World Development Co Ltd's, New World Telephone Holdings Ltd and Wharf (Holdings) Ltd's, New T&T Hong Kong Ltd.

``The proposal is to ensure maximum utilisation of networks in Hong Kong,'' secretary for information technology and broadcasting KC Kwong told a news conference.

``A vibrant television industry in Hong Kong will not only widen viewers' programme choice, but also enhance Hong Kong's position as a leading broadcasting hub in the region,'' he said.

Wharf Cable, the cable television arm of Wharf, will receive interconnection fees from other operators for the use of its network. If a commercial agreement cannot be reached with the operators, the telecommunication authority could determine a fair interconnection fee, the government said.

Officials at Wharf were not immediately available for comment.

The government announcement follows a one-month consultation on television policy launched in September.

The government said cross-media ownership restrictions would continue to apply to domestic free and domestic pay television programme services licensees to avoid conflicts of interest and the build-up of media monopoly.

Television Broadcasts Ltd (TVB) and Asia Television Ltd (ATV) are the two terrestrial television stations in Hong Kong. TVB welcomed the government's move but urged the government to remove the restriction for TVB to enter the pay-TV sector.

``The government should try to remove the barriers for operators to freely invest in other businesses, such as pay-television,'' a TVB spokesman said.

The 1998 review of television policy contained no specific proposals on opening the domestic free television market.

Kwong said there were no changes in restriction on non-Hong Kong residents holding interests in local free TV firms.

``The restriction which caps non-residents' shareholding in free TV firms at 49 per cent has not changed,'' Kwong said.

``We would like to see the controlling stake held by Hong Kong residents because Hong Kong people can provide services which meet the needs of Hong Kong people,'' he said.