The new shares, or 20.1 percent of the enlarged share capital, are set at an indicative price range of HK$1.48-HK$1.71 (19-22 US cents) including brokerage fees.

Most of the proceeds will be used to upgrade the company's networks. Final pricing of the deal will be determined on October 30 in New York.

About 5 per cent of the IPO will be sold to Hong Kong retail investors, who can subscribe for shares today, and the rest will be placed with institutions.

The shares are expected to begin trading on November 6 in New York and the following day in Hong Kong.

China Telecom said it plans to pay a dividend of about 6.5 HK cents per share for this year and the next, and its dividend yield would be between 3.6 and 4.1 per cent.

The company revealed in Hong Kong yesterday that it would consider buying five provincial networks from its State-owned parent China Telecom Group 6 months after the IPO.

"One of our long-term strategies is to acquire quality assets from our parent," said Zhou Deqiang, chairman and chief executive officer, at a video conference from New York.

"Six months after the IPO, we are still considering the acquisition of about five networks," he added but did not give the names of the five networks.

The chairman also said that China Telecom had asked for permission from the Ministry of Information to increase the fees that it could charge other telecom carriers to connect to its network, which, if approved, would boost the company's revenue.

(China Daily October 25, 2002)