What happens when telcos practically give it away ($13 for 100 megs!)?

NiQ Lai, chief financial officer of Hong Kong's City Telecom (CTEL), stopped by FORTUNE's San Francisco offices this week while on an investor tour. I had one question for him: Short of moving to Hong Kong, how can I get some of what he's selling?

I pay $25 to AT&T (T) every month for DSL that tops out at 1.5 megabits per second downstream, and 384Kbps for uploads. It's not always as fast as advertised. Sometimes it doesn't work at all. Cable offers faster speeds in my neighborhood, but the service also costs more, so I just try to remember the days of dial-up modems and convince myself that DSL is good enough.

But if we had a US version of City Telecom, I'd switch in a heartbeat – which is precisely what the residents of Hong Kong have been doing lately.

City Telecom's 400,000 customers pay $13 a month for 100 megabit synchronous broadband. And they get a money-back guarantee: If they don't clock 80% of the promised speed, the company pays them twice their monthly fee.

"We have a big hairy audacious goal," says Lai, referring to the term popularized by "Good to Great" author Jim Collins. "We want to be the largest IP service provider in Hong Kong by 2016. And three years into our strategy, we're well on our way to doing it."

If you live within coverage area of Verizon's FiOS service (VZ), you pay as much as $150 a month for up to 50 megs downstream and 20 upstream.

How can City Telecom possibly offer service that's more than twice as fast at less than 10% of the price?

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Even as Canada's Rogers Communications and Germany's T-Mobile compete to offer the worst voice and data plans for the iPhone 3G, Hutchison Global Communications on Monday unveiled what may be the best.

Hutchison (HTX), which stuck a deal with Apple (AAPL) in May to bring the iPhone to Hong Kong and Macau, will be offering customers a choice of two pricing plans:

• 8GB iPhone for HK$2,938 ($377) plus HK$188 per month ($24/month) for 500MB voice and data
• 8GB iPhone for free plus HK$498 per month ($64/month) for 2,200 minutes airtime and unlimited data.

"We believe the (minimum price) plan is comfortable enough for average data users," a Hutchison spokesperson told the Dow Jones Newswire, adding that 500 megabytes will allow users to send 250,000 emails or browse Apple's Web site 2,000 times. (link)

Bottom line in U.S. dollars: Including the cost of the phone, Hong Kong residents will pay between $955 and $1,532 over the life of a 24 month contract.

Some comparisons (all expressed in U.S. dollars for the equivalent of a 2-year contract):

• Hutchison in Hong Kong: $955 (500MB voice and data) to $1,532 (2,200 min., unlimited data)
• O2 (TEF) in the U.K.: $1,698 (75 minutes, unlimited data) to $3,588 (3000 min., unlimited data)
• AT&T (T) in the U.S.: $1,879 (450 min., unlimited data) to $3,318 (unlimited voice and data)
• T-Mobile (DT) in Germany: $1,366 (500MB data) to $3,374 (5GB data)
• Rogers (RCI) in Canada: $1,624 (150 min., 400 MB data) to $2,932 (800 min., 2GB data)

It's not China Mobile — and it's not the mainland — but it's a start.

Hutchison Telecom, a small Hong Kong-based carrier controlled by Li Ka-shing (more on him below), announced on Thursday that it had struck a deal with Apple (AAPL) to bring the iPhone to Hong Kong and Macau, two former colonies that are now special administrative regions of the People's Republic of China.

Hutchison (HTX) played an important role in the early days of mobile telephony. In 1994 it launched the Orange brand in the U.K. and in 1997 invested heavily in VoiceStream (now T-Mobile) in the U.S. By 2000 it had sold its interests in both companies and was using the proceeds to develop a global 3G business. Last year it sold controlling interest in its popular "Hutch" product in India to Vodafone for $13.1 billion.

In addition to Hong Kong and Macau, it offers 2G and 3G services in Australia, Ghana, Indonesia, Israel, Sri Lanka, Thailand, and Vietnam.

Li Ka-shing — nicknamed "Superman" by the Hong Kong business press — is the picture of a 21st century tycoon. According to Wikipedia, he is the eleventh richest man in the world and the richest person of Chinese descent, with an estimated wealth of $26.5 billion.