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PRIME MINISTER'S VISIT TO HONG KONG
CABLE AND WIRELESS TELECOMMUNICATIONS FRANCHISES
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Background
1. Lord Young has written to the Prime Minister and the
Secretary of State asking that Hong Kong's
telecommunications policy be raised privately with the
Governor during the visit. Lord Young's concern is to
obtain reassurance that Cable and Wireless' (C & W) existing
franchises - for domestic communications until 1995 and for
international communications until 2006 will not be
terminated early and that there will be level playing fields
when they do fall for renewal.
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2. It is true that pressure is growing in Hong Kong, as in
most markets where telecommunications monopolies apply, for liberalisation. AT&T has been active in lobbying. The
Hong Kong Government has appointed Booz Allen Hamilton, an
American firm, as consultants to consider whether a second telecommunications network should be built in Hong Kong and to assess the impact of removing the exclusive franchise on local calls after it expires in 1995. Their report is now with HKG.
3.
In February 1991 HKG stated there was no intention to terminate the domestic monopoly of Hong Kong Telecommunications (C & W's subsidiary in Hong Kong) but said that if very compelling and overriding factors in favour of the consumer existed, they would contemplate dissolving the international monopoly, which is the more profitable of the two. At C & W's AGM on 16 July Lord Young revealed that he had received the personal assurance of the Governor that HKG have no intention of abrogating or
cancelling the franchises before their due date. The HKG
cannot of course speak for the SARG post-1997.
The
international franchise was granted in 1981 well before we
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