CONFIDENTIAL
From recent discussions with Government representatives we believe that:-
A. Government do not intend to maintain the current regulatory environment and that they seek to introduce further liberalisation of the telecommunications
industry.
B.
C.
Both Government and Hong Kong Telecom agree that it is not in the best interest of Hong Kong for the Government to terminate the existing franchise agreements with HKT and HKTI ahead of their contractual expiry date.
Government recognise that certain aspects of BAH's third option to further liberalise Hong Kong's telecommunications industry do cause us concern.
However,
believe that by cooperative discussion with Government 'we may reach agreement on a mutually acceptable telecommunications environment which will provide further benefits to customers, whilst at the same time providing adequate incentives telecommunications providers.
to
PROPOSAL TO TERMINATE EXISTING FRANCHISE AGREEMENTS
For the sake of completeness we comment as follows on this proposal.
We believe that breaking the existing telephone franchise agreements with HKT and HKTI is not in the best interest of Hong Kong. Quite simply we consider that it would damage Government's credibility in regard to all franchises and agreements with the private sector.
Hong Kong Telecom's franchises were negotiated in good faith, and its shareholders have invested substantial capital to honour its franchise obligations. Moreover, as Hong Kong is generally recognised as having one of the most advanced. telecommunications systems in the world - a a fact also acknowledged in the BAH report HKT and HKTI have fulfilled and continue to meet the obligations of their franchises.
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CONFIDENTIAL
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