"There is a worldwide trend towards free tabloid newspapers that deliver news in an easy-to-read, lively and no-nonsense style," Sing Tao News Corp chairman Charles Ho Tsu-kwok told a press conference. "The time has arrived for Hong Kong's first free- circulation English newspaper."

Initially, 120,000 copies will be distributed daily at more than 80 high- traffic points in the main business districts, including Central, Western, Admiralty, Wan Chai, Causeway Bay, Quarry Bay, and Tsim Sha Tsui.

Copies will also go to commercial buildings, residential areas, schools and universities, four- and five-star hotels, airlines and sports clubs, as well as locations in Macau.

Circulation will be fully audited.

"Turning The Standard into a free paper is not something that came about yesterday," Ho said. "We have been pondering this since last year, and are prepared to enter into this uncharted market."

Analysts said the move to produce the city's largest English-language daily newspaper by circulation could cause advertisers to leave rival publications, such as the South China Morning Post. "I think it will definitely have a negative impact on SCMP," said Deutsche Bank analyst Rebecca Jiang, referring to the paper's owner, SCMP Group (0583). "But it may take some time for the advertisers to really switch to the free paper."

The Standard's move followed a change in the information disclosure requirements of the Hong Kong stock exchange, as listed companies are no longer obligated to place paid newspaper announcements, which comprised a significant portion of newspaper revenues. "The announcement of the Hong Kong stock exchange did have a substantial effect on the company," Ho admitted. "We had to change."

The Standard's switch follows the introduction of two free Chinese papers by the parent company. Headline Daily is the largest-circulating free newspaper in Hong Kong at 700,000 copies, while Express Post is the top free weekend paper at more than 300,000 copies.

"The move will bring changes to the industry," said Joseph Chan Man, a journalism professor at the Chinese University of Hong Kong. "With The Standard switching to free circulation, being the first English paper or the fourth local paper in the city changing to this business model, the trend of printing free newspapers is more obvious in the city."

Traditional media such as newspapers are evolving into a new business model, noted Chan Yuen-ying, head journalism professor at Hong Kong University.

"Being the first English newspaper in the city to go for free circulation, The Standard has actually taken a bold step," Chan said. "The paper is strengthening its competitiveness."

The SCMP may be forced to drop its advertising rates to prevent too many advertisers from moving away, Jiang said. "There's not much they can do to expand the readership," she said. "I think probably a more reasonable response is to cut the [ad] rates."

If no new players enter the free- paper market, The Standard can break even in 12 or 18 months, said Sing Tao chief executive Lo Wing-hung.

Following the experience of Headline Daily, The Standard will double its circulation if a new competitor joins the fray, Lo said. "No matter what, we will be ahead of our competitors by at least two times their circulation," he said. "This is how Headline Daily secured a substantial market share."

The Standard's editor-in-chief Ivan Tong Kam-piu said the staff's initial reaction to the new business strategy was "very, very positive." He said the number of staff will not change.