CABLE & WIRELESS
The Rt Hon Lord Young of Graffham Executive Chairman
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A
Yoradnie wnu Buns today pl. for brief
briefing Secrely 2 have en route.
EPS
The Rt Hon Douglas Hurd MP.,
Foreign Secretary,
PS / Lad Couthners nu Boums
Foreign & Commonwealth Office, Whitehall,
London, S.W.1.
Es first.
CABLE AND WIRELESS pic
New Mercury House
26 Red Lion Square
London WC1R 4UQ
Telephone: 071 315 4404
3018
International: +44 71 315 4404
Facsimile: 071 315 5019
29th August, 1991
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Year Youngles,
When you visit Hong Kong next month, I wonder if you would mind raising telecommunications policy privately with the Governor.
Cable & Wireless owns 58% of Hong Kong Telecom which currently has franchises for domestic and international communications. We estimate that it contributes over £250 million to the UK balance of payments; by 1995 this will rise to over £450 million.
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Foreign mainly US companies have fomented a debate about our franchises, suggesting that they be terminated early or that the Hong Kong Government imposes a confiscatory tariff reduction on
us.
When our franchises fall due for renewal, the Hong Kong Government might seek to introduce more competition. Our main concern would be to ensure that the playing field was reasonably level. We would object to an early termination
or
to
confiscatory regulatory action. This could also have а disastrous impact on investor perceptions of Hong Kong. It would be seen as a signal that the Hong Kong Government did not stand by its agreements with the private sector and was no longer serious about maintaining a predictable and business-oriented environment.
Hong Kong's telecommunications are generally regarded as excellent and inexpensive. Precipitate action would be bad for investor confidence in Hong Kong. It would be bad for Hong Kong Telecom's British, Hong Kong, Chinese and US shareholders. And it would put at risk potentially £450 million a year of the UK's visible and invisible exports.
И I am writing in similar terms to the Prime Minister.
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Registered Number: 238525 England Registered Office: Mercury House Theobalds Road, London WC1X 8RX
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