CONFIDENTIAL
FM HONG KONG
TO PRIORITY FCO
TELNO 2841
OF 130255Z SEPTEMBER 91
CONFIDENTIAL
MB
Polis
сору
115326
MDLIAN 9346
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13.
HONG KONG TELNO 2770: EXECUTIVE COUNCIL AT THE PART I MEETING OF THE EXECUTIVE COUNCIL HELD ON 10 SEPTEMBER, THE COUNCIL ADVISED AND THE DEPUTY TO THE GOVERNOR ORDERED THAT
(A)
(MEMORANDUM XCC(91) 123 REFERS
THE BANKING LICENCE OF THE PITTSBURGH NATIONAL BANK SHOULD BE REVOKED WITH EFFECT FROM 10 SEPTEMBER 1991:
(B) (XCC(91)127)
A DRAFT NEGOTIATING BRIEF TO BE USED IN FUTURE DISCUSSIONS WITH THE HONG KONG TELEPHONE COMPANY (TELCO) AND HONG KONG TELECOM INTERNATIONAL LTD. (HKTI) SHOULD BE PREPARED AND SUBMITTED FOR THE CONSIDERATION OF THE COUNCIL ON 1 OCTOBER 1991. THE BROAD PARAMETERS OF THE BRIEF SHOULD BE AS FOLLOWS
(I) GENERAL ALTHOUGH TELCO AND HKTI ARE PROVIDING A GOOD SERVICE, ADDITIONAL COMPETITION SHOULD BE INTRODUCED TO ENSURE THAT THIS SITUATION CONTINUES: THAT TARIFFS ARE KEPT AS LOW AS
POSSIBLE: AND THAT NEW SERVICES ARE OFFERED. SUCH COMPETITION SHOULD BE INTRODUCED IN A MANNER EQUITABLE TO TELCO AND HKTI PARTICULARLY IN RELATION TO COSTS. A SYSTEM SHOULD BE DEVISED IN WHICH TARIFFS ARE DETERMINED ACCORDING TO A FORMULA WHICH MAKES
REFERENCE TO THE RETAIL PRICE INDEX:
(II) INTERNATIONAL SERVICES
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THERE WAS NO WISH ON THE PART OF
GOVERNMENT TO TERMINATE THE EXISTING FRANCHISE BEFORE ITS SCHEDULED EXPIRY IN 2006. PRESSURE FOR EARLY TERMINATION COULD BE MORE FIRMLY RESISTED IF TARIFFS ARE REDUCED AND BROUGHT INTO LINE
WITH ACTUAL COSTS.
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(III) LOCAL VOICE SERVICE THERE SHOULD BE A MOVE IN THE DIRECTION OF NON-EXCLUSIVE FRANCHISE ARRANGEMENTS.
GOVERNMENT DID
NOT WISH TO CREATE CONDITIONS IN WHICH A SECOND TELECOMMUNICATIONS NETWORK BECAME INEVITABLE AND IT DID NOT WISH TO FORCE THIS ON THE MARKET. GOVERNMENT WISHED TO SEE A SYSTEM IN WHICH OTHER OPERATORS HAD ACCESS TO TELCO'S SYSTEM BUT WERE CHARGED A FAIR RATE FROM BOTH SIDES' POINT OF VIEW. BUT
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CONFIDENTIAL
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