C&W and NEC to co-operate

Cable and Wireless has linked up with NEC to exchange information on communications technology and marketing in a deal designed to boost both companies' share of the fast-growing telecoms market in the Far East.

Although NEC spoke confidently about the deal enabling the two companies to share visions of the future of the telecoms market, C&W played down the link. "It is just one of a number of corporate relationships,''a spokesman said. "It does not tie us to any one supplier.'' C&W shares rose 12p to 391p.

The Japanese maker of communications equipment and the UK telecoms company have already started swapping information on satellite systems.

They will now look at ways of jointly providing telecoms exchange equipment and boosting their share of the Asian mobile telephone market.

C&W will be able to use NEC's production plant in Malaysia and China. NEC hopes the link-up will boost its European sales. NEC said it had so far received orders worth 100bn yen (£635m) from C&W.

C&W is one of the most active Western telecommunications companies in Asia, and all are struggling to get a firmer foothold in China and other emerging markets.

An NEC spokeswoman said C&W would share information on future telecoms projects, while the Japanese company would share its technology. She said: "The agreement is not aimed at simply supplying our equipment to C&W. We hope to share future visions in thetelecommunications business through the agreement."

A C&W spokesman said no money would change hands.

Eric Gann, telecommunications analyst at Goldman Sachs, said: "With Japan's market reaching saturation many domestic telecommunication equipment makers are looking for opportunities to expand in Asia, where infrastructures still lag behind."

NEC, which has a telecommunications equipment plant in China, makes products ranging from switchboards to satellite stations and has expertise in laying fibre-optic cables. C&W owns 57.5 per cent of Hong Kong's biggest communications company, Hongkong Telecommunications.