C.F. 326
a
CONFIDENTIAL #3
3
possible that HKT could make similar claims about cost saving innovations. We find no firm basis for altering BAH's cost comparison, whether to HCV's advantage or disadvantage.
C.
International Telecommunications
HCV : BAH's forecast for growth in demand for international telecommunications is significantly lower than that submitted by HCV.
In
Administration's Response: BAH's forecasts of growth in
demand for the various telecommunications services,
internal and external, were arrived at following consideration of information from a variety of sources.
the case of international telecommunications services, BAH has confirmed that HCV's forecast was significantly more optimistic than its own, which was close to that of HK Telecom. The major part of the benefit arising under Scenario 5 accrues from competition in the provision of international telephone services and is therefore crucially dependent on the forecast growth in demand for these services. Hence, a conservative approach to calculating that demand growth as BAH has evidently followed, serves to underpin the reliability of the net benefit forecast under scenario 5, which is the key element in the case for
network competition.
Economic Services Branch
Government Secretariat
3 June 1988
335Y
CONFIDENTIAL #2