CONFIDENTIAL
For information on 26 March 1991
MKB3 121/2
-CABLE
+ Wireling
APD 1991
File
XCCI (91) 12
Ра
Copy No.22 33. Cake & Wireless lile.
NOTE FOR EXECUTIVE COUNCIL
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تے
REORGANISATION OF THE HONG KONG TELEPHONE COMPANY LIMITED AND THE HONG KONG TELECOM INTERNATIONAL LIMITED
INTRODUCTION
Hong Kong Telecommunications Limited (HK Telecom) has decided to merge certain support functions of the Hong Kong Telephone Company Limited (Telco) and Hong Kong Telecom International Limited (HKTI) under HK Telecom with effect from April 1991. This reorganisation, which HK Telecom intends to announce on 27 March 1991, is likely to be the first phase of a longer-term plan to combine the entire workforce of the two companies under a single operating division within Hong Kong
1
Telecom.
BACKGROUND
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On 3 November 1987, Members were informed of Cable and Wireless plc' proposal to reorganise its Hong Kong interests under a new holding company, HK Telecom. As a result of this reorganisation, Telco and HKTI became wholly-owned subsidiaries of HK Telecom, which took over Telco's Hong Kong stock market listing.
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HK Telecom now intends to rationalise its operations further by centralising the finance, personnel and marketing functions of Telco and HKTI under HK Telecom. Both Telco and HKTI will second staff to HK Telecom to carry out the centralised functions. According to HK Telecom, the main purpose of this reorganisation is to improve operational efficiency and customer service by providing a single interface with the customer for all regulated services. HK Telecom intends to keep Telco and HKTI) as separate legal entities, with the former holding a franchise and the latter, an exclusive licence. Telco and HKTI will each maintain its own operations and engineering departments and retain the assets relevant to its operations.
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In tandem with the integration of these three functions HK Telecom intends to make staff cuts throughout the organisation of both companies. Approximately 1100 staff in Telco and HKTI will be made redundant, and a further 700 posts likely to be saved through normal wastage during the course of this year. It is understood that redundancy notices will be issued on Wednesday 27 March 1991.
CONFIDENTIAL