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Andrew Chetham

While not revolutionary, last week's con firmation from Britain's Cable & Wireless (C&W) that it will rename Hongkong Telecom appears to make sense in a world where global image-making is gathering importance.

 At the heart of the revamp, dubbed internally as 'Operation Springboard', is a plan to change the English name of Hongkong Telecom to reflect its position within C&W, which holds 54 per cent of the company.

 Leaks of a potential name change emerged last autumn. In public, Hongkong Telecom insisted no firm decisions have been taken.

 However, there now appears little doubt that Hongkong Telecom will be reborn into something featuring the C&W name.

 Reports suggest the relaunch may come this month.

 Though something of a mouthful, Cable & Wireless Hongkong Telecom appears to be the front-runner.

 Much independent comment has been passed on why Hongkong Telecom should change its name.

 After all, Hongkong Telecom has spent 12 years and countless advertising dollars building its brand into one of the most respected and valued in the SAR.

 In addition to the name change, millions will need to be spent to change logos and corporate messages across the different businesses.

 Interestingly, at the time of Hongkong Telecom's 1987 creation by the merger of the Hong Kong Telephone and C&W international service operations, similar arguments raged.

 Except the situation was reversed.

 Some in the new company questioned the wisdom of losing the C&W name from the title then.

 They argued that C&W was a strong brand and there was no sense in losing that identity.

 Now events have come full circle.

 And again many believe it is hard to see a justification for another name change.

 But this is not a domestic issue.

 C&W has a global business in an industry where being global counts.

 Having a worldwide presence also means ensuring that customers and investors know you have a global image.

 C&W is a mid-sized telephone company in an industry where the players appear to become considerably bigger as each week passes.

 It has no choice other than to play up the global nature of its business - in fact, C&W's worldwide reach has always been its best card given the lack of a fixed-line base at home in Britain.

 So, it is no surprise that C&W wants to see its name next to that of its prize asset. Added to this is Hongkong Telecom's unusual position of having an independent name - something of an anomaly in the C&W group - when all the company's other main businesses carry the firm's initials.

 In making a change now Telecom has joined HSBC, which in a much more radical move is ditching its Hong Kong operating names in favour of a global image.

 HSBC's action also appears aimed at showing investors and customers the scale and breadth of its business.

 C&W's move is clearly aimed at investors and multinational customers, potentially giving them an improved investment rating and bolstering its market capitalisation.

 Few doubt that C&W is 'in play' in a world where huge bids for telecommunications companies (not all friendly) are increasingly common.

 That this is a strategy designed to appeal to investors outside the SAR is underlined by the fact that its name in Chinese (and that used by the majority of its customer base) is thought to be unlikely to be affected by the change.

News that Cable & Wireless would be changing the name of Hongkong Telecom to bring it within the group umbrella is no surprise. The only question now is when, ANDREW CHETHAM reports.



Global awareness at core of HK Telecom's image switch