TNAG-1779-FCO40-2539-Hong-Kong-international-telecommunications-1988 — Page 11

To sum up, PMG has advised that a substantial degree of cable and probably duct laying would still be required if Telco were to be the sole broadband network provider. Permitting a second network would probably cause greater disruption, but it is not possible in either case to draw firm conclusions on the degree of disruption. Putting this problem into perspective, records of road opening applications submitted to

to Highways Department over the last five years, 1982-86, indicate that Telco's applications have constituted from about 33% in 1982 to 24% in 1986 of total applications by all utilities with Telco's share generally declining over the period. The building of a broadband network either by Telco alone, or by Telco and HCV. will most likely result in telecommunications related road openings returning to a higher share of the total.

Longer term deregulation of telecommunications services

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In connection with its proposal to establish a second public telecommunications network, HCV has asked for an early review of the exclusive franchises of Telco and CWHK. The Administration considers that such a review at present is inappropriate for the following reasons

(a) as the Telco and CWHK franchises still have 8 and 19 years to run respectively, it is too early to review their future particularly in view of the current rapid development of telecommunications technology ;

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(b) the technology for simple voice telephone connection to broadband networks is unlikely to be available before 1995 and even then until it is competitively priced, voice telephony will generally continue to be carried on copper-pair networks, i.e.

i.e. Telco's existing system;

(c)

if a second network is allowed, this would in itself provide a major opportunity for increased competition in telecommunications;

and

(d) in the case of the CWHK franchise, any review of its future would have implications for the future SAR and as such would require discussion by the JLG.

Whilst it is not proposed to give any indication of an early review of the Telco and

and CWHK exclusive franchises, Members may wish to note that there are legal provisions for allowing the establishment of an alternative telephone network