Secondly, and much more significantly for the future of British
telecommunication interests in Hong Kong, is the appointment by
the Hong Kong Government of 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 this month could be damaging for British commercial
interests. The Hong Kong Government publicly stated in February
that there was no intention to terminate Hong Kong Telephone's
local calls monopoly, but admitted 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 and Wireless and UK interests would be likely to be net
losers.
ок
The key issue at stake is the resolution of any conflict between
the desirability of increased competition and any moves
prematurely to end Cable & Wireless' exclusive licences for
internal and external telecommunications prior to 1995 and 2006.