and Telegraph for example threatening to move to other Asian
centres unless the Hong Kong Government accedes to
competition.
The Hong Kong Government has appointed Booz Allen Hamilton,
an American firm of 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 the current agreement expires in 1995. The
report, which is expected to be completed shortly, is expected
to recommend early liberalisation of the network. The Hong
Kong Government publicly stated in February that there was no
intention to terminate Hong Kong Telephones local calls
monopoly, but said that if very compelling and overriding
factors in favour of the consumer existed they would
contemplate dissolving the international monopoly. As
internal telephone calls are free, revenue is made almost
entirely on international calls.
While any liberalisation programme would open the door for
British Telecom to enter the market, the likelihood is that
there would be pressure within Hong Kong to introduce non-
British companies into the telephone network rather than
maintaining it as a wholly British interest. Any change would
be at the expense of Cable & Wireless and UK interests would
be likely to be net losers.