Dr Smith, Ladies and Gentlemen,

I am delighted to be here tonight to celebrate with you the 125th Anniversary of Cable & Wireless.

It is indeed fitting that Hong Kong should be one of the locations hosting the celebration. As you well know, our Chinese lineage makes us treasure long and close relationships. Cable & Wireless has had a very close association with Hong Kong throughout its history. The 1870s, which saw the birth of the Eastern Telegraph Company, the forerunner of Cable & Wireless, represented a momentous decade in the history of telecommunications. The 1990s, as we enter what many commentators call "The Information Age", would appear to be another such momentous decade. I believe some interesting comparisons can be made between the 1870s and 1990s.

In 1871, we laid the first submarine telegraph cable. The cable landed at what is still called Telegraph Bay near Pokfulam on Hong Kong Island. The China Submarine Telegraph Company which laid the cable became part of the Eastern Telegraph Company in 1873 - the forerunner of Cable & Wireless which Mr John Pender founded in 1872. Hence our celebration today of 125 years of Cable & Wireless.

Today Cable & Wireless retains its strong links with Hong Kong through its 54% stake in Hong Kong Telecom and its stake in AsiaSat. For the year ended 31 March 1997, Hong Kong contributed over 65% of Cable & Wireless' world wide profits on some 38% of its world wide turnover: in money terms, Hong Kong profits of over 1,000 million pounds on a turnover of some 2,600 million pounds.

John Pender had a vision of an inter-connected world via his submarine cables. His vision, risky as it was, has endured and is in the process of being realised in ways beyond his imagining. Cable & Wireless, directly or through its local subsidiaries, has satellite connections through INTELSAT and AsiaSat, and has numerous submarine cable connections - the most recent being its participation in FLAG (Fibre Optic Link Around the Globe) which is the largest high capacity submarine optic fibre cable system in the world connecting this region to Europe.

From a policy perspective, the way Hong Kong is connected to the rest of the world is a serious matter indeed. As we cross the threshold of the brave new world of the Information Age, the Government has come to place even more consideration on these issues. Questions arise at a very basic level: for example, what role do we wish Hong Kong as an economy to play in future? How can we best manage the transition of our community to an information society? How can we assist our country, China, in considering these issues? The more questions we ask the more that arise.

We are, however, convinced that the Government must place priority on addressing these questions. Last week, our Chief Executive, Mr Tung, expressed a vision of Hong Kong assuming a leadership position in the information industries. He also outlined the fact that we will take a holistic approach by designating one policy secretary to co-ordinate all the Government's work on these issues. Furthermore, this policy secretary will be tasked with producing a thorough and well considered plan of action to serve as a blueprint as we go forward.

We believe the role of Government in this work is one of leadership. The Government must facilitate the establishment of an open common interface information infrastructure; the laying down of an appropriate regulatory framework to remove obstacles to interconnection; the development of a policy for promoting IT applications (including the development of computer literacy and enhancing skill training for IT professionals); and the commissioning of pilot projects which make innovative use of the developing infrastructure. The institutional framework within Government to facilitate this is now being finalised and our preliminary thoughts on how to proceed are forming quickly. We hope to provide details in the near future.

Of course, we here in Hong Kong never ignore the valuable contributions that the private sector brings to major infrastructure projects. Just as Cable and Wireless has invested in Hong Kong in the past (to the mutual advantage of itself and the Hong Kong community I must say), so will we be looking to the private sector to share with us a vision of Hong Kong as an Information Society and to turn the vision into reality through investments.

What might the vision become in reality and how fast may it emerge? Already as I travel throughout Hong Kong and the region, I see people connecting via telecommunications in a large variety of ways. I see businessmen plugged into their offices via e-mail at airports throughout the region. I see people receiving stock market information via their pagers. I see children getting information for school projects from sources around the world. I see academics discussing problems with colleagues around the world and see them teaching on the Internet. And I see doctors engaging in remote diagnosis of patients' problems. The information industries have unleashed powerful changes in our lives already. Yet what we see is but a foretaste of what the Information Age may bring.

Perhaps there is a historical analogy: John Pender and his colleagues brought the telegraph to Hong Kong. Today this infrastructure project looks rudimentary when viewed from today's world of engineering, technology and project financing. But they did more than implement an engineering project; they increased the efficiency with which business intelligence was disseminated, enabling new generations of traders to start business and thus changing Hong Kong forever. In the view of one historian of Hong Kong (Endacott) this was of more significance to trading in Hong Kong than the easing of physical communication with Europe through the opening of the Suez Canal! Turning to the 1990s, the significance of an information society goes way beyond telecommunications companies to the whole range of service industries which together comprise 83% of our GDP and for which telecommunications is a vital underpinning. The developments in the information industries are likely to change the very way in which mankind lives and works and the way business, trade and commerce is conducted globally. We in Hong Kong know that we must face up to the challenges of the Information Age in order to retain our competitiveness in the new era. Mr Tung's vision is an important step along this way.

Hong Kong has had a long history of facing up to challenges and embracing new technology. Returning to the 1870s, it was in 1876 that the telephone was invented by Alexander Graham Bell. The first telephone came to Hong Kong in 1877 and by 1882 Hong Kong had its first telephone exchange - marking the beginning of proper telephone services in Hong Kong. So even in the 1800's Hong Kong was an early adopter of telecommunications! Now in the 1990s Hong Kong maintains its leadership position - nowhere else in the world can one experience such high quality mobile services even while travelling on an underground train. We are leading in the commercial roll-out of video-on-demand and I know that Hong Kong Telecom is one of the applicants seeking a VOD licence. Competition in telecommunications continues to surprise me with service innovations constantly appearing in the market. It is with quite some confidence that I can conclude that Hong Kong will stay at the forefront in this vital sector.

Finally I thought I should say that to refresh my knowledge of Cable & Wireless and of Hong Kong Telecom before this dinner, I looked again through your annual reports - as the Financial Secretary I do take interest in these things. Such reports seldom make stimulating reading, but yours were an exception. Of course the profit figures I have already mentioned did register. But another aspect which did impress me was the commitment of the Cable and Wireless companies to competition. Cable and Wireless is committed to competition through, for instance, the second carriers, Mercury in the UK and Optus in Australia. It is active as a new entrant in so many other countries such as Japan, Singapore, Canada and the US. Linus Cheung in his Chief Executive's report for Hong Kong Telecom said "Instead of complaining about competition, we have embraced it. And in doing so we have not only grown our business and revenues, we have developed into a telecommunications company that offers truly best-in-class service to all our customers". I am confident that, as Hong Kong Telecom faces more competition, you will be able to draw on your 125 years of experience to increase still further your business and develop new revenue streams. With your strong links to Hong Kong and the unfolding opportunities of Greater China, you are at the heart of one of the most important and vibrant world telecommunication markets.

On these optimistic notes for the future I should like to wish good health to the company for at least a further 125 years of prosperity around the globe.