GRS 400 CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE FCO
TELNO 462
Confidential
40011
OF O9O8OOZ FEBRUARY 87
RECKIVEL
10FEB 1987
Et
CABLE AND WIRELESS.
YOU MAY ALREADY BE AWARE THAT OLSEN OF CABLE AND WIRELESS (CW)
IS PLANNING TO SEEK AN APPOINTMENT WITH SIR DAVID WILSON IN THE
NEAR FUTURE. YOU WILL WISH TO KNOW THE BACKGROUND TO WHAT OLSEN IS
LIKELY TO SAY.
2. WE ARE CURRENTLY CONSIDERING WHETHER TO PERMIT BRITISH TELECOM
(BT) (IN PARTNERSHIP WITH LI KA-SHING'S HUTCHISON) TO ESTABLISH
A SECOND TELECOMMUNICATIONS NETWORK IN HONG KONG TO BE USED TO
CARRY CABLE TELEVISION AND NON-VOICE TELECOMMUNICATIONS SERVICES.
THE LATTER ARE OUTSIDE TELCO'S EXCLUSIVE FRANCHISE WHICH IS
RESTRICTED TO VOICE TELEPHONY.
3. TELCO/CW CLAIM THAT THE PROFITABILITY OF TELCO WOULD BE
SERIOUSLY AFFECTED IF BT/HUTCHISON ARE PERMITTED TO ESTABLISH A
SECOND NETWORK CARRYING CABLE TELEVISION AND OTHER TELECOMMUNICATION
SERVICES EXCLUDING VOICE TELEPHONY. WHILE THEY APPEAR TO ACCEPT
THE PRINCIPLE THAT COMPETITION IN TELECOMMUNICATIONS (OTHER THAN THE
BASIC TELEPHONE SERVICES) WOULD NOT AFFECT THE PROFITABILITY OF
THEIR EXCLUSIVE TELEPHONE FRANCHISE THEY CLAIM THAT BT/HUTCHISON WOULD INFRINGE THE FRANCHISE BY PROVIDING ILLEGALLY VOICE TELEPHONE SERVICE ON THEIR OWN NETWORK IN PARTICULAR TO BUSINESS SUBSCRIBERS. AS A RESULT THERE WOULD HAVE TO BE SOME TARIFF REBALANCING OF TELEPHONE SERVICES WHICH WOULD BE TO THE FINANCIAL DISADVANTAGE
OF RESIDENTIAL SUBSCRIBERS.
4. WE FIND IT DIFFICULT TO ACCEPT THAT A COMPANY OF BT'S REPUTATION WOULD INDULGE IN SUCH FLAGRANT DISREGARD OF THE LAW TO THE EXTENT THAT TELCO/CW WOULD BE SERIOUSLY AFFECTED AND THAT EVEN IF THEY DID
THAT THE HONG KONG TELECOMMUNICATIONS AUTHORITY WOULD NOT BE ABLE TO TRACK IT DOWN. NEVERTHELESS, WE ARE REVIEWING THE POTENTIAL EFFECTIVENESS OF OUR POLICING CAPABILITIES.
5. FROM DISCUSSIONS WITH OLSEN IT WOULD SEEM THAT CW HAVE RECENTLY BEEN WORSTED IN A NUMBER OF ENCOUNTERS WITH BT IN PREVIOUS CW STRONGHOLDS AROUND THE WORLD. OLSEN MENTIONED BELIZE, GIBRALTAR, QATAR AND THE SOLOMON ISLANDS. AS A RESULT CW ARE NOT UNNATURALLY UPTIGHT ABOUT BT'S OVERSEAS ACTIVITIES AND ARE MOST ANXIOUS THAT
THEY SHOULD NOT GET A FOOTHOLD IN HONG KONG WHICH IS CW'S MAJOR
PROFIT CENTRE.
Confidential
16.
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