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SUNDAY Communications Limited - Correspondence - Prepared By TNT Filings
Inc.

September 23, 2005

Mr. Larry Spirgel

Assistant Director

United States Securities and Exchange Commission

Division of Corporation Finance

450 Fifth Street, N.W.

Washington, D.C. 20549

Dear Mr. Spirgel,

  Re:   SUNDAY
  Communications Limited

  Form 20-F/A for the year ended December 31, 2004

  Filed July 6, 2005

  File No. 333-11470

  ___________________________________________________

I refer to your letter dated August 9, 2005. Set out below is
our response to your comments, using the same headings and numberings as those
set out in your letter.

Form 20-F for the year ended December 31, 2004:

Item 3.A Selected Financial Data, page 3

  We refer to your disclosure of 'net cash
  (outflow)/inflow' data prepared in accordance with HK GAAP. Since these
  amounts could be different under US GAAP, please revise your disclosure to
  include amounts in accordance with US GAAP.

  We respectfully submit to the Staff that there is no
  difference in the disclosure of 'net cash (outflow)/inflow' for SUNDAY under HKGAAP and USGAAP as all the reconciling items between the two GAAPs, as shown
  in Note 26 on F-38, are wholly non-cash items. Accordingly, the cash flows
  under both GAAPs are the same.

1

  In addition, you should provide in a note to the financial
  statements a quantified description of the material differences of the cash
  flows reported between HK GAAP and US GAAP. Please refer to Form 20F Item
  17(c)(2)(iii).

  We agree to include in our future filings a quantified
  description of the material differences of the cash flows reported between HK
  GAAP and US GAAP as a note in "Item 3.A SELECTED FINANCIAL DATA" whenever such
  differences arise.

  Refer to your EBITDA
  presentation under US GAAP. Since you present a measure labeled as "EBITDA" as
  a measure of operating performance, it is generally not appropriate to exclude
  "share of losses from joint venture" since these charges are recurring. Refer
  to Item 10 of Regulation S-K and Question 8 of our Frequently Asked Questions
  document on non-GAAP measures which is available on our website at: http://www.sec.gov/divisions/corpfin/faqs/nongaapfaq.htm>.
  If you present a non-GAAP measure that excludes these recurring charges, you
  must provide detailed disclosures why management believes a performance
  measure that excludes these recurring charges is useful. Your discussion
  should, at a minimum, disclose the following:

    the manner in which
    management uses the non-GAAP measure to conduct or evaluate the business;

    the economic substance
    behind management's decision to use such a measure;

    the
    material limitations associated with the use of the non-GAAP measure as
    compared to the use of the most directly comparable GAAP measure, net income
    (loss); and

    the manner in
    which management compensates for these limitations when using the non-GAAP
    financial measure.

  Revise your presentation as appropriate.

  Kindly note that our preparation of EBITDA, which excluded
  "share of losses from joint venture, was to conform with requirements that we
  were subject to in our financial covenants with our lenders, such as Huawei
  Tech. Investment Limited during 2004, and Nortel Networks (Asia) Limited & The
  Overseas Union Bank for years before 2004. Accordingly we need to present the
  EBITDA excluding the share of losses from the joint venture. We will revise
  the disclosure in the future filings to clearly indicate the reasons of the
  alternate presentation of the EBITDA.

2

  Additionally - in Note 6 to "Item 3.A SELECTED FINANCIAL
  DATA", we have highlighted that a key limitation of our calculation of EBITDA,
  which is not a measure under HK GAAP or US GAAP, is that our formulation of
  EBITDA is not comparable to that of other companies, which may determine
  EBITDA differently. Further, we advise that investors should not consider our
  EBITDA measure in isolation, or as an alternative to net profit/(loss) as
  determined under HK GAAP or US GAAP as an indicator of operating performance,
  or as an alternative to cash flow as determined under HK GAAP or US GAAP as a
  measure of liquidity. We also provide a reconciliation of the EBITDA to the
  Net (loss)/profit in the same note on page 4 so as to separately indicate the
  impact of "share of losses from joint venture".

  Your definition of
  EBITDA does not conform to the commonly understood definition of EBITDA. Thus,
  it is not appropriate to label it EBITDA. Rather, you must call it something
  other than EBITDA and use a name that clearly describes all adjustments. You
  must also clearly explain that your measure differs from EBITDA and that it is
  not comparable to EBITDA as reported by other companies in the industry.
  Specifically, disclose the definition of the acronym EBITDA, earnings before
  interest, taxes, depreciation and amortization, and explain that the
  calculation of your non-GAAP measure also excludes "share losses from joint
  venture."

  We agree to use an alternative label of "Adjusted EBITDA" in
  our future filings. In addition we will continue to include a clear definition
  of the "Adjusted EBITDA" financial measure in Note 6 to "Item 3.A SELECTED
  FINANCIAL DATA" as

  " (loss)/profit before interest income and financial
  costs, income tax expense/(benefit), depreciation, amortization and share of
  losses from joint ventures" so as to differentiate our computation of
  EBITDA from that of other companies.

3

Summary of differences between HK GAAP and US GAAP, page
F-39

  Expand your accounting
  policy for connection fees under US GAAP to disclose how you account for
  connection fees related to sales and service agreements. It appears that your
  policy for connection fees under US GAAP as is relates to the provision of
  mobile services only. Please clarify and disclose any difference in the
  accounting policy between sales through your direct sales channels and sales
  through your dealers.

  The connection fees recognized in 2003 and 2004 under US
  GAAP amounted to HK$411,000 and HK$1,200, representing 1% and less than 1% of
  our net profits in the respective years. As such, we consider the financial
  impact to be minimal. However, by way of improved disclosure in our future
  filings, we will further elaborate on our accounting policy under US GAAP as
  follows:

    "Connection fees are charged to postpaid mobile service
    subscribers upon activation of service. Under US GAAP, the fees, net of
    direct incremental costs incurred, are recognized as deferred revenue on
    balance sheet and later credited to profit and loss statements as revenue
    over the estimated customer service period, which are estimated based on the
    expected stabilized churn rates."

  The above policy is applied to all postpaid subscribers from
  various sales channels. As a result, there is no difference in treatment
  between sales through direct sales or dealers.

  Tell us how you
  applied the consensus in EITF 00-21 and the impact in your financial
  statements.

  Currently, we have three types of revenue arrangements in
  our business model, namely sales of mobile services on a standalone basis,
  sales of mobile phones and accessories on a standalone basis as well as sales
  of mobile services together with mobile phones. Only the third arrangement
  contains multiple deliverables that is required to be assessed according to
  the consensus in EITF 00-21.

4

  To satisfy the consensus of EITF 00-21, we have assessed the
  third arrangement according to the following three principles:

    a)
    Revenue arrangements with
    multiple deliverables, where qualified, should be divided into separate
    units of accounting;

    b)
    Arrangement consideration should
    be allocated among the separate units of accounting based on their relative
    fair values;

    c)
    Applicable revenue recognition
    criteria should be considered separately for separate units of accounting.

    (a)
    With reference to our current business arrangement on sales of mobile
    services together with mobile phones, we are able to separate the offer into
    two deliverables: (i) the delivered item is the mobile phone which is sold
    and delivered upon activation of mobile service, and has a standalone
    selling price; and (ii) the undelivered item is the airtime service to be
    provided throughout the contract period.

    (b)
    The fair value of the undelivered item, i.e. the mobile service, is the
    standalone price which we are able to charge customers for such service over
    the contract period. The fair value of the delivered item, i.e. the mobile
    phone, is calculated by using the residual method, i.e. the consideration
    for the total arrangement in the transaction less the fair value of mobile
    services. In fact, the result under such method is in line with our current
    policy of accounting for subsidized handset sales, which is recognized to
    the extent of the purchase price paid by the subscriber, excluding any
    upfront prepayment amount allocated to the airtime to be delivered in
    future. For further details, please refer to Note 2 - Principal Accounting
    Policies (b) (ii) - Sales of mobile phones and accessories on F-11 of our
    filed Form 20-F/A. Kindly note that the result revenue that would be
    recognized using the relative fair value method is the same as that
    recognized under the residual method as we only recognize revenues to the
    extent of cash received under the bundled sales plan.

    (c)
    Our revenue recognition of the handset bundled plan is indifferent to any
    standalone transactions involving sales of handsets or mobile services.
    Handset sales are recognized upon delivery, while mobile service revenue is
    accounted for when such services are delivered. The upfront prepayment
    received is recorded as deferred revenue and included as a liability in the
    balance sheet.

  Our total deferred revenue in connection with handset sales
  was HK$13.4 million as of December 31, 2004, which was included in the balance
  sheet as part of the subscriptions received in advance.

5

  Refer to your disclosure on sales of mobile phones and
  accessories at the bottom of page 35. It is unclear to us how the rebate
  program works and the relationship with the prepaid services. To help us
  understand your accounting, please provide us with the related journal
  entries.

  We would like to respectfully advise the Staff that we have
  not applied any handset rebate program to our prepaid mobile service
  subscribers.

  The handset rebate arises from our handset bundled plans. As
  indicated in our analysis of Comment 6 above, the receipts from the handset
  rebate program are allocated among sales of mobile services and sales of
  mobile phones and accessories, by applying the principles of EITF 00-21. The
  portion allocated to the sales of mobile services represents the upfront
  subscription fees received, which is then set off against the monthly trade
  receivables in respect of sales of mobile service throughout the contract
  period.

  If the Staff requires additional clarifications on the above
  accounting treatment, we will provide you with the related journal entries for
  your further review.

  Refer to the
  reconciling item to write back compensation cost with respect to the deferred
  compensation for share options. It is unclear to us why you wrote back the
  compensation cost. Please explain.

  The write back of the compensation costs relates to the
  options that were forfeited upon the termination of employment of certain
  employees.

Consolidated Statements of Profits and Losses, pages F-42

  It appears that the
  captions "cost of sales of mobile phones and accessories" and "cost of
  services" excludes depreciation and amortization for property and equipment
  that directly attributed to the generation of revenue. Revise to comply with
  SAB Topic 11:B as applicable, by identifying the amount of applicable
  depreciation that is excluded from the above captions. Alternatively, you can
  indicate that the above captions exclude 'depreciation' and 'amortization'.

  We agree to revise the above captions in our future filings
  to clearly indicate that the costs of services and sales of mobile phones and
  accessories exclude 'depreciation' and 'amortization'.

6

  In addition, you should revise to include the impairment loss
  of your investment in a joint venture within the caption 'share of losses of
  joint ventures'.

  Kindly note that we have already included the impairment
  loss of HK$66,000 in the share of loss of our investment in a joint venture in
  our consolidated statements of profits & losses on F-3 and F-42. We have
  further disclosed the item in note 12 to our consolidated financial statements
  on F-23 as follows:

    "For the year ended December 31, 2004, the Group
    recognized the share of losses from a joint venture of HK$258,000 (2003:
    HK$4,426,000) in the consolidated statements of profits and losses. The
    amounts included share of net liabilities of HK$192,000 (2003: HK$2,095,000)
    and additional provision for impairment of HK$66,000 (2003: HK$2,331,000)."

  We do not believe that any additional
  disclosure in future filings will be required as the joint venture will be in
  the process of liquidation in the foreseeable future, and thus no material
  additional losses are expected to incur.

Others, page F-23

  Refer to Note 12 and
  the investment in a joint venture. It appears that you were required to file
  separate financial statement of Atria under Rule 3-09 of Regulation S-X.
  Please tell us how you determined that separate financial statements under
  Rule 3-09 of Regulation S-X were not required. When performing the income test
  in accordance with Rule 1-02(w) of Regulation S-X, you are required to include
  the impairment of your investment together with the equity pick-up in the
  income (loss) of the investee. Supplementally provide us with your supporting
  calculations.

  Kindly note that we have performed the income test in
  accordance with Rule 1-02 (w) of Regulation S-X. Since the investment does not
  meet any of the thresholds specified in Rule 3-09 for the presentation of
  separate financial statements - it is our submission that our existing
  disclosure is adequate.

  As requested - please find our supporting calculations for
  2003 and 2004 in the appendix.

7

We acknowledge that:

  We are responsible for the
  adequacy and accuracy of the disclosure in the filings;

  Staff comments or changes to
  disclosure in response to staff comments do not foreclose the Commission from
  taking any action with respect to the filings; and

  We may not assert staff
  comments as a defense in any proceeding initiated by the Commission or any
  person under the federal securities laws of the United States.

      Yours Sincerely,

      /s/ Raymond Mak Wai Man

      Director, Finance

      SUNDAY Communications

      Limited

8

    Appendix

    Computation:

    Condition 1:

    2002
    2003
    2004

    HK$'000
    HK$'000
    HK$'000

    Net investment costs and advances to Atria
    Limited
    3,322
    2,331
    2,397

    Total assets of SUNDAY Group as of December
    31

    1,810,900

    1,732,700

    2,164,500

         Result

    0.18%

    0.13%

    0.11%

    Condition 3:

    2002
    2003
    2004

    HK$'000
    HK$'000
    HK$'000

         Share in net loss of
    JV(1)
    (1,905)
    (2,095)
    (192)

         Impairment loss of
    the investment in JV(2)

    (16,703)

    (2,331)

    (66)

         Total share in net
    losses of JVs charged to the

    consolidated statement of pro