The Wireless Cable Merger

Radio Record, Volume III, Issue 14, 18 October 1929, Page 7

The Wireless Cable Merger

Importance to New Zealand [THE social and economic existence of New Zealand, a country geographically isolated from the rest of the world, is wholly dependent ypon all forms of international communication. Realising this fact, we can readily appreciate the important significance of the wireless and _ cables merger recently consummated in England. With the rapid development of wireless in general, and the beam system in particular, it has long been apparent that the utilisation of this invention for the purpose of international communication would be inevitable. With the application of this scheme, it was soon realised that the wireless and cable services would become competitive, with probably undesirable results -to the latter. Hence an amalgamation was proposed and carried through, and now the interests of both are governed by the Imperial and International Communications Company. Shortly before the end of the general election in New. Zealand last year, the Government announced that it approved in principle of the proposed form of the amalgamation. Sir Joseph Ward, however, speaking recently in the House of Representatives on the introduction of the measure formally approving of New Zealand’s support in this matter, strongly crit’ :ised the transaction. He ‘stated that’ the abandonment of supreme control by the British Government was an unfortunate and wrong step. from the point of view of both the Pacific cable system and the future of the Empire. He regretted that New Zealand had had no opportunity of protesting against the sale of: the Pacific cable. The London ‘‘Times," in commenting on Sir Joseph Ward’s criticism, stated that the merger was recommended unanimously after carefyl and prolonged consideration by the Imperial Cable and Wireless. Conference, at which New Zealand. was represented by the High Commissioner, Sir James Parr. Owing to the competition of the cheaper beam service, Government-owned cables were likely to become unremunerative, and it was principally for this reason the sale was decided upon. The suggestion made by Sir Joseph Ward that the merger company would be in supreme control ignores one of the most important recommendations made by the conference-namely, that the Governments of the Empire, as trustees for the public, should exercise eontrol over the policy of the Merger Communications Company, in addition to approving the nomination of certain members of the board of the company. The conference therefore proposed the creation of an Advisory Committee nominated by the Government, which should: be given absolute power with regard to any proposed increase of existing rates. The merger was undoubtedly @ more advantageous: thing to cable owners, whether private or Governmental, than to the wireless companies, for it enabled the cable interests to capitalise, as it were, their position almost before they

had begun to feel the effects of wireless competition. On the other hand, the wireless companies stabilised their earnings at the opening of a very promising career. It must be borne in mind. however. that the merger was not recommended for any one reason, but for a number, and amongst them, the course of events abroad. Very large corporations have been ereated in America, and it was necessary to rationalise the communication services of the Empire in order to enable them to meet this. competition on equal terms. The merger may be regarded as the first effort’ at Imperial industrial rationalisation, and if the — results produce a higher efficiency with better service to the public it should not be the last.