LAST year was seen by many as the biggest in the telecoms industry

since Alexander Graham Bell invented the telephone 120 years ago.

This year will test how soon the communications revolution starts

delivering.

''Let's be positive and assume that they are going to come through,''

said Lord Young, chairman of Cable & Wireless. ''Then you are beginning

to see fairly substan-

tial changes in the market place.

Billions of dollars are at stake in a series of deals which would see

American Telephone & Telegraph pay $12.6 billion for mobile phone

company McCaw Cellular Communications, while telecoms firm Bell Atlantic

last year proposed a $30 billion merger with US cable giant

Tele-Communication.

British Telecom is also in on the act, proposing to pay $4300m for a

20% stake in MCI Communications.

''The biggest challenge for next year is to get more level playing

fields both in Europe and in the US,'' said Lord Young.

''I don't believe we should let AT&T come into Europe any more, even

in the UK until the US takes away its unfair practices against us,'' he

said.

''In the US where they are going to put out 49 PCS (digital mobile

phone) licences, we're not allowed to hold more than 20%,'' he said,

arguing for more access to US markets.

In Europe, which aims to deregulate phone markets in 1998, change is

taking place slowly. Last year's alliance between state-owned France

Telecom and Deutsche Telekom posed few threats, as long as markets are

opened up, he felt.

''I'm not awfully worried about the European alliance, because two

monopolies do not a competitive animal make, provided that Europe opens

up, so we and BT and others can go in and provide competitive

services.''

If competition in Europe does not arise quickly that would not be

wholly negative for C&W, thought Lord Young.

''It won't necessarily be bad for Cable & Wireless because we'll go

off and invest somewhere else in the world, but it will be extremely bad

for Europe, which needs a more competitive telecommunications

environment.''

Asked about C&W's biggest priority for 1994, Lord Young replied: ''Oh,

continue to expand and grow Mercury.

''Our main area of priority is the Pacific Rim, we're looking to

expand services there because that's the fastest growing part of the

world. And looking towards Europe and hoping that the Community will

open up.'' -- Reuter.

Lord Young