TNAG-2247-FCO40-3230-Business-interests-in-Hong-Kong-Cable-&-Wireless-1991 — Page 174

CODE 18-77

1

病

2117

Reference

VT37THU.597

TO:

Minister for Trade

FROM:

Alan Murray

V/306

215 5412

cc Secretary of State

Mr Redwood

Sir Peter Gregson

Mr Roberts

Mr Lane

Dep Sec

Mr Meadway

Mr Salvidge

Mr Phillips

Dep Sec OT2

TP

TP2

EEP1

4 August 1991

Mr Johnson Mr Love

OT2/2

Mr Anisfeld

Sp Adv

CABLE & WIRELESS INTERESTS IN HONG KONG

Issue

The impact upon Cable & Wireless's interests in Hong Kong if the Hong Kong Government proceeds with

liberalisation of Hong Kong's domestic and international telecommunications.

Recommendation

To take note.

Timing

Routine.

Argument

There has been growing pressure from some quarters in Hong Kong for a break up of Cable & Wireless's monopoly position in local and international telecommunication services. The US, who are very successful in the Hong Kong market overall, have been particularly active with AT & T, for example, threatening to move to other Asian centres unless the Hong Kong Government accedes to competition. The HK Government are concerned that if they do not liberalise, US interests in particular may indeed move some of their activities to another telecoms hub (eg Singapore) in the region.

The Hong Kong Government has appointed Booz Allen Hamilton, an American firm of consultants, to consider whether a second telecommunications network should be built in Hong Kong and to assess the impact of removing the exclusive franchise on local calls after the current agreement expires in 1995. The report which is now in the hands of the Hong Kong Government, is understood to recommend early liberalisation of the network.

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