A battle for bandwidth, customers and revenue has made the local telecoms market one of the most merciless in the world.
And events this week have made something clear: misery is likely to call on Hong Kong's telecom operators more frequently.
SmarTone - one of the top three mobile phone service providers in the territory - was left dumbfounded on Monday when rivals refused to take its bait and stop offering unlimited internet use plans for smartphone subscribers.
SmarTone had - very smartly - announced on February 2 that it would, 11 days after that, no longer offer unlimited internet use plans for smartphone subscribers.
Under the new plans, subscribers would - from February 13 - be allowed to download only a maximum of two gigabytes of data for HK$238 per month. They could download 1GB more for a monthly fee of HK$100 or an additional 3GB for HK$200.
The move was seen as the latest volley fired by SmarTone in its battle to wrest more market share from rivals.
In the past 12 to 18 months, Hutchison Telecom and CSL - the two other top mobile phone service providers in the SAR - had lost about 1.5 percent to 2 percent market share to SmarTone, according to Morgan Stanley.
Hutchison is the largest operator by revenue, generating HK$8.6 billion in the year to June 30, 2011.
Through its mobile phone service plans CSL took in HK$6.26 billion during the same period, similar to SmarTone's HK$6.42 billion.
Hutchison and CSL each had three million subscribers as of the end of June, while 1.5 million had signed up with SmarTone.
So, Hutchison is the clear leader in the local mobile telephony market. But the number two spot is divided - some would argue - between CSL and SmarTone.
So when the telecom regulator late last year issued a guideline saying operators must clearly spell out what they mean by "unlimited plans" for smartphone subscribers, SmarTone decided to strike the first blow.
It revealed plans to do away with such plans, thinking rivals were bound to follow suit.
This was based on sound reasoning - not wishful thinking.
"Unlimited plans" had put both the networks and finances of all operators under pressure. So they resorted to reducing internet speeds or raising charges for subscribers.
This obviously incensed many users, who had taken the operators at their word.
Some had even cancelled their home broadband connections, relying solely on their handsets not only to check e-mails, browse Facebook, watch movies, but download content into their personal computers.
So when internet speeds were reduced, none of these things - essential for the average Hongkonger - was possible anymore. They complained to the Office of The Telecommunications Authority - which was compelled to act.
The first significant OFTA action took place back in 2010, when CSL was fined HK$130,000 for suppressing the internet speeds of high-volume mobile users.
The speed was slashed from 3.6 megabytes per second to just 16 kilobytes per second, which is lower than what dial-up networks offered in the early 1990s, making it extremely difficult for subscribers to do something basic like check their e-mails.
More fines followed but still the complaints to OFTA about operators not keeping their word grew louder.
The clamor for clarity finally forced the regulator to raise the red flag: it issued a directive strongly encouraging operators to clarify the restrictions on their unlimited plans.
SmarTone wasted no time getting on the bandwagon. Many expected other operators would follow suit.
So, when CSL on February 13 - the date on which unlimited SmarTone plans were expiring - said it would stick to its plans, everyone was surprised.
CSL said it would still offer unlimited plans, albeit with a twist: once subscribers exceed 5GB, they incur no additional charges for additional usage but internet speeds for the remainder of the month will be reduced.
"We believe our customers need more time to understand their data usage behavior before moving to volume-based plans. Therefore, we will continue to offer unlimited data plans and provide tools for customers to clearly understand how much data they use," CSL chief marketing officer Mark Liversidge said.
Hutchison followed suit. So, SmarTone had little choice but to swallow its own pride and reinstate unlimited plans and also follow CSL. It was immediately hit by a severe backlash on internet forums.
Some of the netizens accused the carrier of "obviously cheating subscribers into extending their service contracts" and of being "dishonest."
Others vowed to switch to other carriers once their contracts had expired.
Some complained to the Consumer Council, accusing the operator of misleading subscribers.
Chief executive Connie Lau Yin-hing conceded the firm's move created confusion, perhaps even damaged its reputation.
"I stood and waited at a [SmarTone] outlet for more than three hours on February 12 just to get my unlimited plans extended, but they would not let me do so unless I bought a new handset for HK$6,000, which I did," one subscriber said.
"The next day [when SmarTone said it would keep unlimited plans] I felt like a fool."
The firms yielded to further pressure yesterday and revealed that those who had signed contracts between February 2 and 12 could have them cancelled and get their money back.
So, it has been a total surrender by SmarTone. Some may argue it had perhaps bitten off far more than it could chew.
It may be premature, however, to mock the operator.
Morgan Stanley thinks local mobile carriers have lost a "golden opportunity" to walk away from unlimited data plans - and infinite network pledges.
It has downgraded the sector's outlook. In the early days when smartphones first came on the market, operators used unlimited schemes to woo customers, a market watcher pointed out.
But when the spectrum began to saturate, high-volume users became a burden as operators needed to provide extra network strength, incurring higher capital and operational expenditures.
This was primarily due to a minority of mobile users "abusing" the unlimited plans.
It is estimated that just 5 percent of subscribers use more than 5GB per month on their smartphones.
So, the 5GB threshold of CSL is reasonable, according to Credit Suisse as it is likely to keep abuser numbers down.
One analyst at an European investment bank said SmarTone failed because the 2GB it was offering with its monthly plan was really too limited for demanding users.
"It could have been the market standard if they had set the cap at 3GB or 4GB," analysts said.
An executive at a SmarTone rival, however, said the carrier was forced to set the threshold at 2GB because it was short on bandwidth.
In 2009, the firm lost a bid to win a license for a network that could eventually be upgraded to a fourth-generation platform.
SmarTone chief executive Douglas Li admitted network pressure was a key factor behind its move to abandon unlimited plans.
Li said data usage per user have surged seven times in two years, but some high volume users have been taking advantage of the infrastructure.
"Why should the majority of users subsidize a few who use a lot?" Li asked.
He said a volume-based pricing based on the user-pays principle will relieve pressure for a general price hike.
Another concern for the industry is the potential slowdown of revenue growth.
Morgan Stanley said smartphone penetration in Hong Kong had reached a high level of 50 to 60 percent at the end of last year.
There could be, from the viewpoint of average revenue per user, limited upside from further smartphone migration - that is, more people taking to the latest- generation mobiles. That is exactly what has happened in Singapore, a very similar market to Hong Kong's.
The current equilibrium of pricing, however, could be temporary as CSL said it will carry on plans to still implement a volume-based pricing structure - thereby abandoning unlimited plans - later this year.
So, CSL is getting ready to fire the first volley in Hong Kong's next battle of telecom operators.