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April 2, 1987


By CBR Staff Writer

Cable and Wireless Plc signed a memorandum of understanding yesterday with Syarikat Telekom Malaysia, STM, to help install and run a UKP62m submarine fibre optic cable system between the mainland and the islands that make up Malaysia. C&W, which will hold 49% of the joint venture and STM 51%, is reinforcing its already strong position in the Far East and the Pacific from which it took some 65% of its profits last year. C&W is also part of a consortium that plans to build a fibre optic link between Hong Kong, South Korea and Japan and it is helping to link China and Hong Kong. The company also has a 20% shareholding in a venture with US company Pacific Telecom to lay the first fibre optic cable to link the US North West coast and Japan. Approval is still being sought for the US end of the project from the US Federal Communications Commission but that is expected any day. C&W sees the Malaysian contract as one its most significant since British Telecom was privatised in November 1984. The Malaysian system is due to start operating in 1989 and will link the Malaysian peninsula with the eastern Malaysian states of Sabah and Sarawak. It will carry both domestic and international traffic. For political and tactical reasons, Cable & Wireless is still not admitting the possibility that it will be denied an effective role in international telecommunications from Japan, but there is clearly no overwhelming reason why the pan-Pacific cable has to terminate in Japan rather than in any one of a string of other Far Eastern countries. If the Japanese do decide not to allow their companies to participate in the cable, Japan will be the principal loser, because the cable will inevitably reduce telecommunications costs across the Pacific, and if it is built without Japanese participation, Japanese users will either demand to use local facilities only for the short hop to the neighbouring country where the cable does terminate, or pay over the odds for international calls.

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