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
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Life and Style
Couples have been having sex less in 2014, according to a new survey
New Articles
i100... with this review
Holly's review of Peterborough's Pizza Express quickly went viral on social media
footballTim Sherwood: This might be th match to wake up Manchester City
Arts and Entertainment
musicHow female vocalists are now writing their own hits
New Articles
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Blahnik says: 'I think I understand the English more than they do themselves'
Arts and Entertainment
Michelle Dockery as Lady Mary Crawley in Downton Abbey
TVInside Downton Abbey series 5
Life and Style
The term 'normcore' was given the oxygen of publicity by New York magazine during the autumn/winter shows in Paris in February
fashionWhen is a trend a non-trend? When it's Normcore, since you ask
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam