Newport, Gwent-based data communications supplier Newbridge Networks Ltd, UK subsidiary of the Canadian company, is attempting to gain a headstart in the estmated $8,400m-a-year Soviet Union telecommunications market by way of participation in two joint venture companies, and as minority shareholder in a future international consortium set up to develop a tax free business park as soon as the thaw (in its strictly meteorological sense) sets in. Newbridge, which designs and markets a range of multiplexers, network management software and complete network configurations, says it was the UK Department of Trade & Industry that first gave the advice to move in fast, for despite its size, the Soviet Union is not a bottomless pit, and it will be a matter of first come, first served. The proposed Moscow International Park of Commerce is the result of the reforms instigated by Mikhail Gorbachev last year, and is to be a tax and duty free zone like the one established at Shannon airport in Eire. A strip of land covering six square miles and adjacent to the airport and Moscow to Leningrad railway has been set aside for the building project, which will include the development of manufacturing and commercial facilities, as well as Western-style accommodation, shopping malls and leisure facilities after the fashion of the London Docklands development. The move into the Soviet Union is also being effected by the formation of two joint venture concerns, one with the Ministry of Radio for the development and marketing of local area network equipment, and one with the Ministry of Telecommunications for wide area networks; Newbridge has 88% and 66% interests in these respectively. These figures do not, however, translate into any meaningful estimate of financial committment, as the joint ventures are built more around technical transfer agreements, with the Soviets learning skills from Newbridge, and Newbridge making an assessment of the technical know-how to be capitalised on in Moscow, where offices have already been set up. Despite the obvious room for improvement that exists in Soviet Union telecommunications presently, an international call takes almost a working day to set up, and there is a 10 month waiting list for connection making money out of what is potentially the second largest market for telecommunications in the world is another matter altogether. Already this year we have seen firms putting forward their own theories for the repatriation of revenues, with some intending to deal strictly in hard currency, others by taking minority stakes in local concerns. The Newbridge approach to getting money back to the West will be to accept roubles for goods sold, and convert these revenues into commodities that will then be exported for hard currency; alternatively, Newbridge will cut out all rouble transactions completely by returning to the age-old system of barter, finally getting its hands on Western currency by the same method of export. In common with every company looking East for business, Newbridge’s dealings with the Soviet Union are, in its own words, tentative, and yesterday’s presentation closed with a quote by Sir Winston Churchill, describing the Soviet Union as a riddle wrapped in a mystery inside an enigma. In the meantime, more recent developments than perestroika may mean that a more accessible road for Newbridge into Eastern Europe will be through East Germany via SEL Alcatel, which, along with AT&T, is one of the Canadian’s main international distributors.
