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PCCW hooks up with Netcom

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The two fixed-line players are in talks on a cross-border, strategic partnership

PCCW is in talks with China Network Communications Group to form a strategic partnership that may result in the mainland's No2 fixed-line player becoming a shareholder in its core telecommunications network.

The Hong Kong company confirmed the talks with China Netcom, which has 220 billion yuan in assets, over cross-border business co-operation that could win PCCW access to the mainland market.

'Strategic and business co-operation opportunities include, but are not limited to, joint ventures relating to certain assets of the company, which may include [Netcom] taking an equity interest in PCCW-HKT,' it said in a statement to the stock exchange.

A potential pooling of assets would win the growth-challenged operator access to the mainland's until now closed network services market, an ambition the firm has long pushed for but never realised.

No details of the proposed deal structure were available last night as PCCW sought to contain a leak which emerged late last week on a mainland website.

Industry sources said Netcom might introduce PCCW as a shareholder to its southern provinces start-up ventures, where it runs a distant second to China Telecom Corp.

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