PACTEL &lt;PAC> SEES EARNINGS GROWTH

  Pacific Telesis Group chairman Donald
  Guinn told a meeting of security analysts that the company sees
  continued earnings growth in 1987 above the 1.08 billion dlrs,
  or 5.02 dlrs per share, earned in 1986.
      Guinn also said that capital spending stood at about 1.8
  billion dlrs in 1986, and the company expected the figure to
  remain flat each year through 1989. He noted that all captial
  spending will be internally financed.
      Guinn also told analysts that the company faced some
  regulatory uncertainties in ongoing rate cases at its Pacific
  Bell operating company.
      In rates hearings before, the California Public Utility
  Commission, Guinn said the company faced a potential 76 mln dlr
  revenue reduction, and due to ongoing discussions with the
  commission, he said the figure might even be greater.
      The company also faces some opposition to a 225 mln dlr
  rate hike requested for 1986. Guinn said the commission found
  180 mln dlrs of the hike was based on questionable calculations
  and assumptions, while 45 mln dlrs might represented unneeded
  modernization costs.
      Guinn also said that the company is still studying whether
  to join an international consortium that plans to lay a
  transpacific telephone cable between the U.S. and Japan.
      "We have not agreed to anything," Guinn said, but added he
  would soon recieve a feasibility study on the venture and the
  company would make a decision soon on participating.
      Asked by an analyst about the recent recommendation by the
  U.S. Department of Justice which would allow the Bell operating
  companies to offer limited long distance services, Guinn said
  the company would likely shy away from that type of expansion.
      "(Long distance services) is a very competitive business.
  It's a commodity business and becoming more so," he said. "I'm
  not so sure we would be interested in getting back into that
  business."
      However, Guinn generally applauded the U.S.
  recommendations, saying they would give more latitude for the
  Bell operating companies to expand into non-regulated
  businesses and provide more flexibility to form strategic
  alliances with other companies.
      He added that while the company welcomes the expansion into
  new areas, it is not currently involved in any acqusition
  talks. "We do not have anything actively under consideration,"
  he said.
  

