C&W set for key role in China's pounds 6bn float

Cable & Wireless, the international telecommunications group, could become the lead corporate investor in the first Chinese telecoms group to open its doors to foreign capital after a Hong Kong flotation which is expected to value it at up to pounds 6bn.

Goldman Sachs, the US investment bank, is said to be working on plans for the stock market launch of China Telecom Hong Kong, which is to become the main vehicle by which China Telecom, the state operator, raises outside capital for development.

Such a move would represent an early payback for Dick Brown, C&W chief executive, following Friday's pounds 726m deal to sell a stake in the group's Hongkong Telecom subsidiary to China Telecom, when it was also promised a place as principal foreign investor in CTHK at some stage in the future.

It could also prove the catalyst for Mr Brown to realise his long-cherished aim of gaining membership of Global One, the rival international telecoms network to BT and MCI's Concert alliance, which includes his former employer, the US group Sprint.

Entry by C&W up to now has been blocked by Deutsche Telecom and France Telecom, which have argued that the British group has nothing to bring to the party. The possibility that it will be the first foreign group to demonstrate a significant presence in the world's most populous country may also pave the way for links with Nippon Telephone & Telegraph, the giant Japanese operator, which has been courted by all the main international telephone groups.

Signs that Friday's China Telecom deal is already thawing relations with Peking came yesterday in suggestions from Hong Kong yesterday that C&W was set to revive talks over the construction of a mobile phone network for the Chinese capital. The company is already working on a fibre- optic link between Peking and Hong Kong, which is set to transfer from British to Chinese control next month.

China Telecom Hong Kong will be the largest public share issue yet of any company with links to mainland China. The plan is for it to have certain assets of China Telecom injected into it before the flotation.

Neither Cable & Wireless nor Goldman Sachs would comment on the reports yesterday, but insiders said a flotation of CTHK would be an entirely logical development. One commented: "That company has been set up to take advantage of capital markets in Hong Kong and give foreign investors access to Chinese telecoms developments. Cable & Wireless will be the lead corporate investor in that company [putting] us into a unique position as the only non-Chinese telecoms investor in China Telecom Hong Kong and through that into the Chinese telecoms market itself."

According to C&W that market is growing at the rate of the equivalent of one British Telecom every 15 months.

Friday's deal involved C&W selling 5.5 per cent of its 59 per cent stake in Hongkong Telecom to China Telecom, with plans to reduce it in stages to reach parity with the Chinese.

Mr Brown promised then that this would not be the last announcement on the deal. "This establishes the platform for news to come later. It won't come in the weeks ahead, but certainly in the months ahead. There is much to be done and that's in the interests of both of us."

The reports come as Cable & Wireless Communications launches a single brand to replace those of Mercury, C&W's main UK subsidiary, and the three cable companies with which it has been merged.

By September the separate brand names will have disappeared in an operation which it knows must not confuse the public.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: DBA Developer - SQL Server

£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Customer Service Administrator

£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

Recruitment Genius: Dialler Administrator

£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

Ashdown Group: Contracts Manager - City of London

£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen