TNAG-1695-FCO40-2351-Future-of-Hong-Kong-nationality-1987 — Page 98

CONFIDENTIAL

and international services by a Joint Government (49%) / C&W (15%) company. agreement envisages the construction of a domestic satellite system.

ST's

Earlier this

year the Post reported that C&W had questioned the ethics of BT's "salesman", an ex ODA supplementee returning to the Islands, who presumably furthered 97's bid with the benefit of inside knowledge. C&W have not voiced objections at home.

6.

GIBRALTAR

C&W has a franchise which was due for reconsideration in 1987. BT have recently told us that they expected C&W to have been replaced by the end of November by a new consortium owned by BT (50%) and "the people of Gibraltar" (50%).

7.

FALKLANDS

C&W have run the islands' systems in the past. BT Teleconsult recommended an C&W alternative package involving a £1m development which won initial support. responded with a bigger and better package which the islanders now favour and which ODA are likely to recommend to FCO Ministers.

8.

CHINA

Both BT and C&W are active in China, the latter especially through its Hong Kong connections. BT have suspicions that Sir Eric's role in Anglo-China trade is disadvantaging them unfairly but so far China has proved big enough for them both and has not been a serious source of conflict.

9.

ISLE OF MAN

A year or so ago BT's contract to provide telecommunication services on the Isle of Man came up for renewal. C&W mounted a major effort to win the contract from BT but BT responded with a greatly improved proposal much more favourable to the Manxmen than in the past and so retained their position. Both BT and C&W appeared unhappy with the others' conduct in the conflict.