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March 23, 1987

CABLE AND WIRELESS TAKES FIGHT TO JAPANESE COURTS, THREATENS SANCTIONS

By CBR Staff Writer

Cable and Wireless Plc is furious at Japanese efforts to shut it out of the franchise to compete with Kokusai Denshin Denwa, in international telecommunications, and is using every weapon at its disposal to fight its corner. It is particularly incensed because the enabling legislation provided for foreign participtation of up to 33%, and Cables would never have gone to the effort and expense of forming its consortium without that promise. It is using its planned UKP1,000m expenditure on telecommunications equipment for the next five years as a bargaining tool in the fight: it has spent some UKP350m on telecoms equipment in Japan over the last 10 years with companies including NEC, Fujitsu, Oki Electric and Mitsubishi. Some UKP500m worth of its UKP1,000m budget for the next five years was to have gone to Japanese companies for switching and transmission equipment as well as fibre optic cables and earth stations. It will now review that programme if the Japanese telecommunications industry follows private arbitrator Fumio Watanabe’s advice that, contrary to current legislation which allows foreign participation in Japanese ventures up to 33.3%, no foreign company should have more than 3% or any management involvement, and is also prepared to challenge the decision in the Japanese courts.

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