The Ministry of Information Industry has pledged not to alter local telephone tariffs for the next few years in an attempt to sweeten the appeal of China Telecom's upcoming initial public offering. The telecommunications industry regulator gave the guarantee in a recent letter to the fixed-line giant, a source said. 'In the Chinese context, a few years means at least three years,' another source said. The guarantee comes after fund managers raised concerns over the regulatory risks of investing in China Telecom. More than 70 per cent of China Telecom's revenue is derived from services subject to government tariff regulation. Last year, China Telecom saw a 3.5 per cent dip in revenue largely due to substantial changes in long-distance tariffs. The company's lead underwriters have begun pre-marketing activities to test investors' appetite towards the US$3 billion to US$4 billion share sale. An official management roadshow is scheduled to start in the middle of this month and the shares are expected to begin trading early next month, according to sources. The scheduled trading debut has been pushed back by about a week because fund managers are demanding to meet with management. Sources said China Telecom was considering increasing its dividend or lowering the price of the shares. They said fund managers were demanding a 3 to 4 per cent dividend yield instead of about 2.5 per cent being offered.