C&W courts controversy in Hong Kong

Controversial proposals to change the name of Mercury Communications, the telephone operator, and Hongkong Telecom are being considered by the new head of their parent company, Cable & Wireless.

One idea under serious discussion by the recently appointed chief executive, Dick Brown, is to rename Mercury and Hongkong Telecom as simply "Cable & Wireless", a brand which means little to ordinary consumers in the UK. Worse still, associating the Cable & Wireless name more prominently with Hongkong Telecom could add damaging imperial connotations to the subsidiary as the British colony prepares to hand over power next year to China.

The rebranding plans are the first fruits of Mr Brown's root and branch review as he battles to define a clear long-term strategy for the group. They are likely to surprise and dismay some insiders who had expected the probe to focus on corporate policy rather than brand identity.

A spokesman yesterday declined to give details of the review, but confirmed that it did involve "reinforcing global identity". He explained: "How that would work is too early to say, but we haven't ruled anything in and we haven't ruled anything out."

The move would end 10 years of brand development by Mercury, which has seen the UK operator spend millions on its ill-fated television advertising campaign using the comedian, Harry Enfield, as the 1940s gentlemen, Mr Grayson and his colleague, Mr Cholmondeley-Warner.

Mercury's subsequent retrenchment, with the loss of 2,500 jobs, is seen as having dented its image, but advertising experts said it remained a much more visible brand than Cable & Wireless.

"At least Mercury is modern," said Tom Rodwell from the advertising agency Court Burkitt. "If you asked people in the street what Cable & Wireless is, most of them either wouldn't know or would think it was something old-fashioned."

Mr Brown has kept a low public profile since he took over as Cable & Wireless chief executive in July, following the acrimonious split between his predecessor, James Ross, and Lord Young. He has spent the past few months touring the group's businesses and is thought to have given preliminary support to plans by Mercury to raise investment from around pounds 300m to pounds 500m for an expansion of its local wire network.

Separately, Mercury yesterday announced a deal to supply phone line capacity to Pipex, the Internet access provider.