Giant mainland fixed-line operator China Telecom is following in the footsteps of China Mobile (Hong Kong) and whetting the appetites of investors with talk of future asset injections. Ahead of its proposed end-October dual listing in Hong Kong and New York, the fixed-line carrier is already said to be poised for a big post-listing injection of additional assets once the timing is right. The four most profitable provincial units under its control are to be listed, but operations in the remaining 17 provinces are likely to be added after the Initial Public Offering (IPO), according to sources involved in the deal. 'It's pretty much like China Mobile - which expands with acquisitions almost once a year,' a banking source said. Listed in October 1997, China Mobile included operations only in Guangdong and Zhejiang provinces when it first offered shares in its IPO. The dominant cellular carrier has since made four acquisitions to purchase an additional 19 provincial networks from its parent. China Telecom, the former monopoly fixed-line carrier on the mainland, retained the China Telecom name and operations in 21 provinces in the south and west of China following the shake-up of the state-owned operation in May. The new China Telecom now controls 70 per cent of the dominant fixed-line carrier's assets, while the remaining 30 per cent - or the networks in 10 northern provinces - were merged with smaller carriers China Netcom and Jitong Network Communications to form China Netcom Group. China Telecom has packaged the operations in Guangdong, Jiangsu, Zhejiang and Shanghai into a mainland-registered company to sell H shares and American Depository Receipts to overseas investors. Sources said China Telecom was planning to raise between US$3 billion and US$3.4 billion from the pending share sales. Others said the offer size could be up to US$4 billion. The share sale is expected to take place in early October with its shares expecting to commence trading by late October. The carrier might then consider acquiring additional assets from its parent as early as six months after its listing, sources said. Although China Telecom was unlikely to detail future acquisition plans in its listing prospectus - expected shortly - a source said the company would set aside about 30-40 per cent of the proceeds for 'working capital'. This, it is believed, would be applied to the acquisitions. Although the company has not identified any target asset, operations in Fujian, Hainan, Anhui, Sichuan and Chongqing are likely to be on top of the list when the listed vehicle expands, the source said. China Telecom's pending mega share sale has hurt its peers such as China Unicom, China Mobile and PCCW as investors have been dumping other telecoms stocks in order to re-balance their portfolios. Over the past month reports that China Telecom plans to sell its shares cheaply and pay out 20 per cent of its profits to shareholders has helped to drive the three telecoms stocks to all-time lows. China Telecom is planning to sell its shares at between eight and 10 times earnings multiples with about 2.5 per cent dividend yield as a sweetener, compared with China Mobile's 11 times and China Unicom's 14 times earnings multiples.