GROWTH rates in international telephone traffic, especially between the territory and China, is set to dominate market perceptions of results at Hongkong Telecom, which today reports results for the year to March 31. Analysts said earnings estimates for the territory's monopoly fixed-line telecom company were tightly grouped and the market would be focusing on key non-financial numbers as well as the mix of earnings. Market consensus calls for profits of $8.69 billion, a rise of 15 per cent, and earnings per share of 78 cents, an increase of 16 per cent. Telecom spooked the market when interim results to September last year showed that call traffic growth to China was just 21 per cent compared with more than 30 per cent in the same period a year before. Chief executive Linus Cheung Wing-lam said at the time the problem was going to be a long-term trend. 'The problem was caused by China's macro-economic fine-tuning and the still very low penetration rate of one phone for every 30 people,' Mr Cheung said. Analysts are still divided as to whether the figure is a blip or a larger problem is being indicated. At least one major brokerage, with a highly respected telecommunications analyst, is forecasting call traffic growth to the mainland will again be below 20 per cent. 'We understand it is below 20 per cent for the full year and some people are going to be disappointed,' the analyst said. 'We think there is more going on than the company's explanation of congestion.' Salomon Brothers director Andrew Harrington blamed the slow call growth primarily on call congestion - a situation which could be turned around at the drop of a hat if the Chinese authorities so decided. 'China's international traffic has been growing 50 per cent a year,' he said. 'Its number of international lines has been growing at 40 per cent a year. 'That situation simply cannot last forever.' Adam Quinton at Merrill Lynch said he tended to believe the problems lay mainly with the economy. 'The number of long distance circuits in China went up to 687,000 from 420,000 last year, a 64 per cent increase,' he said. 'That doesn't suggest the significant problem is congestion.' Both Salomon's Mr Harrington and Merrill's Mr Quinton said investors would also be looking for news on Telecom's much vaunted China deals. The firm said last October that it was negotiating two significant deals in China, but since then silence has reigned and deals such as Singapore Telecom's China-wide paging investment have been announced. Neither analysts expected much, with Mr Harrington suggesting concrete news would probably be broken in a more formal setting. One analyst said: 'I do hear there has been some progress and I think they will give us some news about what is going on.' Today's results will also be the first time the new team at the top, chief executive Mr Cheung and finance director David Prince, face analysts and investors.