Cable & Wireless Plc and its 57.5%-owned Hong Kong Telecommunications Ltd were always going to be the first beneficiaries when China ended its ban on foreign involvement in telecommunications services, and a big crack in China’s resistance appeared yesterday when Kong Kong Telecom announced that it had struck deals with China to explore joint development of a digital cellular telephone network in Peking and study a possible fibre optic link between Hong Kong and Peking. It is a breakthough in many details if not a breakthrough in every detail, Cable & Wireless chief Lord Young declared after returning from official meetings in China. He said his company would be prepared to invest around $250m in the two projects if they proceeded. The fibre optic network would run 1,870 miles from Peking to Guangzhou in the south and link up with Hong Kong. Seeming to lend the lie to suggestions that Cable & Wireless has any plans to sell more of its stake in Hong Kong Telecom, Linus Cheung, the company’s new chief executive, will be joining the main board of Cable & Wireless in January.
