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
Life and Style
Steve Shaw shows Kate how to get wet behind the ears and how to align her neck
healthSteven Shaw - the 'Buddha of Breaststroke' - applies Alexander Technique to the watery sport
Arts and Entertainment
The sight of a bucking bronco in the shape of a pink penis was too much for Hollywood actor and gay rights supporter Martin Sheen, prompting him to boycott a scene in the TV series Grace and Frankie
tv
Sport
footballShirt then goes on sale on Gumtree
Voices
Terry Sue-Patt as Benny in the BBC children’s soap ‘Grange Hill’
voicesGrace Dent on Grange Hill and Terry Sue-Patt
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
music
Arts and Entertainment
Twin Peaks stars Joan Chen, Michael Ontkean, Kyle Maclachlan and Piper Laurie
tvName confirmed for third series
Sport
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
art
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine