Cable & Wireless' chief executive, Dick Brown, is reported to have been in China negotiating a deal for a share in mainland telecomms developments. In return, the Chinese government is believed to have its eye on part of C&W's stake in Hong Kong Telecom.
Cable & Wireless must give up 20 per cent of its share in Hong Kong Telecom before it is permitted to operate in mainland China. Chinese officials have indicated that the country would like the stake, worth around #2 billion. The shares could go to China?s Ministry of Posts and Telecommunications, to Hutchison Whampoa - which partly owns the Orange mobile company - or to Citic, a Beijing-controlled investment group, which already has a 12.27 per cent share in Hong Kong Telecom. Or all three parties could share the chunk of shares.
Last November C&W opened an office in Beijing, which Brown said would place the company in a better position to participate in the development of communications across China.
The telecomms giant and its subsidiaries have already established four joint ventures in China. The most recent is SB Submare Systems, set up in 1995 with China?s Ministry of Posts and Telecommunications, and with Shanghai Posts and Telecommunications, to lay and maintain submarine cables in the Shanghai region.
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