Hong Kong’s second largest fixed line operator City Telecom (CTI) has thrown down the gauntlet to incumbent PCCW, saying it plans to become the number one provider in the Special Administrative Region by 2009. The company plans to continue an aggressive marketing strategy and increase its share of the market to 40% by that date through the delivery of low-cost triple play packages, including pay TV, voice telephony and broadband internet access, over its IP-based network. CTI had 253,000 subscribers at the end of 2004, or 12% of the market. It hopes to take advantage of the scheduled ending of the so-called ‘type II’ interconnection policy in 2007 under which PCCW is expected to lose about 450,000 subscribers – i.e. those which are subscribed to operators which currently lease its network. CTI plans to spend up to USD100 million to upgrade its fibre-optic network and boost coverage to 90%, or nearly 1.8 million homes, by the end of 2007; it currently covers 1.2 million.