JAPAN TELECOM MERGER COULD INVOLVE U.K.,U.S. FIRMS
  Cable and Wireless PLC <CAWL.L> and the
  Pacific Telesis group <PAC.N> may take part in a proposed
  merger of two rival firms seeking to enter Japan's
  international telecommunications market, a senior industry
  official said.
      Fumio Watanabe, head of a telecommunications committee with
  the Federation of Economic Organisations (Keidanren), told a
  news conference Japanese shareholders in the two consortiums
  agreed that the U.S. And British companies will be invited to
  participate in the new merged firm.
      The planned linkup will satisfy Tokyo's request that only
  one private company should enter the market.
      The two consortiums, <International Digital Communications
  Planning Inc> (IDC) and <International Telecom Japan> (ITJ),
  were set up in 1986 to compete with monopoly <Kokusai Denshin
  Denwa Co> (KDD) after the market was deregulated in 1985.
      Watanabe said the Post and Telecommunications Ministry
  wanted only one competitor for the time being because of the
  size of the Japanese telcommunications market and that foreign
  investors will only be allowed to hold a minority stake.
      He estimated the two foreign firms' share in the merged
  consortium at less than three pct and added that even the
  largest shareholders could own only some five pct .
      Cable and Wireless and Japanese trading house <C. Itoh and
  Co.> each have a 20 pct stake in the IDC consortium while
  Pacific Telesis and Merrill Lynch and Co. Inc. <MER.N> jointly
  hold 13 pct .
      ITJ is headed by a rival group of trading houses. Several
  firms including Toyota Motor Corp. <TOYO.T>  belong to both.
      Watanabe said progress was being made towards a merger
  agreement and added that Japanese industry agreed with the
  government on having only one private consortium as two
  companies might invest "excessive" amounts.
      He said talks with Cable & Wireless will continue this
  week.