09:17     PCCW<00008> - Announcement & Resumption of Trading (2)              

    telecommunications services in the PRC and is the holder of               
    approximately 70.5% of CNC HK. The Subscriber, a wholly-owned             
    subsidiary of China Netcom, is an investment holding company.             
                                                                              
    Neither China Netcom nor the Subscriber is interested in any Shares       
    as at the date of this announcement. Upon Completion, the Subscriber      
    will hold approximately 20% of the enlarged issued share capital of       
    the Company. Both China Netcom and the Subscriber are independent         
    third parties which are not connected with the Directors, chief           
    executives or substantial shareholders of the Company or any of its       
    subsidiaries, or any of their respective associates (as such terms        
    are defined in the Listing Rules). Upon Completion, the Subscriber        
    will be a substantial shareholder of the Company and China Netcom         
    will be an associate of a substantial shareholder of the Company, and     
    each of them will therefore constitute a connected person of the          
    Company under the Listing Rules.                                          
                                                                              
    Price of the Subscription Shares                                          
    The price of the Subscription Shares of HK$5.90 per Share was             
    arrived at through arm's length negotiations. This represents a           
    premium of about 25.5% over the closing price per Share of HK$4.70        
    quoted on the Stock Exchange on 19 January 2005. The subscription         
    price also represents a premium of about 23% over the average of the      
    closing prices (of HK$4.80) quoted on the Stock Exchange on the 10        
    trading days ending on 19 January 2005 and a premium of about 17.8%       
    over the average of the closing prices (of HK$5.01) quoted on the         
    Stock Exchange on the 128 trading days ending on 19 January 2005          
    (being the number of trading days in the six month period ending on       
    that date). The aggregate subscription price will be paid in cash by      
    the Subscriber at Completion.                                             
                                                                              
    The Subscription Shares                                                   
    1,343,571,766 new Shares are to be subscribed, representing               
    approximately 25% of the Company's existing issued share capital and      
    approximately 20% of the Company's issued share capital as enlarged       
    by the allotment and issue of the Subscription Shares.                    
                                                                              
    The Subscription Shares will rank, upon issue, pari passu in all          
    respects with the Shares in issue on the date of allotment and issue      
    of the Subscription Shares.                                               
                                                                              
    Conditions of the Subscription                                            
    Completion is conditional upon:                                           
    (A)                                                                       
    the passing by the Independent Shareholders at an extraordinary           
    general meeting of the Company of a resolution to:                        
                                                                              
    (1)                                                                       
    increase the authorised share capital of the Company to HK$2.5            
    billion comprising of ten billion Shares;                                 
                                                                              
    (2)                                                                       
    grant to the Directors a specific mandate to allot, issue and deal        
    with the Subscription Shares; and                                         
                                                                              
    (3)                                                                       
    approve the Anti-Dilution Rights;                                         
    (B)                                                                       
    (1)                                                                       
    listing of and permission to deal in all the Subscription Shares          
    being granted by the Listing Committee of the Stock Exchange; and         
                                                                              
    (2)                                                                       
    the listing and permission referred to in paragraph (B)(1) above not      
    subsequently being revoked prior to Completion;                           
                                                                              
    (C)                                                                       
    delivery by the Subscriber at Completion of a legal opinion from          
    British Virgin Islands counsel relating to, among other things, the       
    capacity and authority of the Subscriber to enter into, and perform       
    its obligations under, the Subscription Agreement;                        
                                                                              
    (D)                                                                       
    delivery by China Netcom at Completion of a legal opinion from PRC        
    counsel relating to, among other things, the capacity and authority       
    of China Netcom to enter into, and perform its obligations under, the     
    Subscription Agreement and the PRC governmental, regulatory or            
    similar consents required by the Subscriber and/or China Netcom to        
    perform their respective obligations under the Subscription               
    Agreement;                                                                
                                                                              
    (E)                                                                       
    the obtaining by China Netcom of such consent or approval of a PRC        
    governmental body or regulatory authority as is required for China        
    Netcom and the Subscriber to enter into and perform their obligations     
    under the Subscription Agreement; and                                     
                                                                              
    (F)                                                                       
    none of the warranties given by the Company in the Subscription           
    Agreement being found to be, or no event occurring or matter arising      
    which renders any of them, untrue or incorrect in any material            
    respect on and as at the date of Completion.                              
                                                                              
    The above conditions (except those conditions which are required to