End of a colonial era

It was probably with some sense of loss that the head of Cable & Wireless HKT, Linus Cheung Wing-lam, told an Internet gathering last summer: 'I love monopolies, I do. A few years ago I was charging $10 a minute to the United States, making $9 profit, and you paid for it.' Times have changed. With the opening up of the international telecommunications market last year, rates for international calls have gone down sharply. 'Now you pay $1 and you say I am too expensive,' Mr Cheung said. Hence, revenues obtained from international calls for Hong Kong's largest listed company have been greatly curtailed, leading to a wage freeze for its 14,000 employees last year.

But though the company was listed in Hong Kong, the profits from the monopoly did not stay here. Hong Kong served as the crown jewel for British telecommunications firm Cable & Wireless plc. Over the past decade, revenues from operations in Hong Kong accounted for 60 per cent of the firm's worldwide profits.

In 1993, Hong Kong Telecommunications' $6.43 billion profit was labelled 'obscene' and 'extremely colonial' by one member of the Telecommunications Users Group, made up of businesses with some of Hong Kong's largest telephone bills.

'Here we have a company whose costs are based on fibre optic cable, whose raw material is melted sand, and whose products are as essential a part of daily life as roads, and they are making what some would construe as an obscene level of profit,' said Tim Cureton, a member of the group and Hongkong Bank's group head of telecommunications at the time.

But those times have changed too.

Now Cable & Wireless cannot enjoy the same profits, and it is moving out, says associate professor in economics at the Chinese University, Dr Kwong Kai-sun. 'Now it is pulling out of Asia because the business environment in Hong Kong and China is not that favourable.' The future of Mr Cheung himself is uncertain. Expected to help the company gain access to the lucrative mainland market, he has not gained appointment to any powerful bodies on the Chinese side.