China Netcom Group (Hong Kong) sees itself as a regional player able to capture surging demand for high-speed data traffic and so setting it apart from close rival China Telecom. But the company is likely to have its work cut out trying to convince the investment public as it heads towards a US$1 billion to $1.5 billion dual listing in Hong Kong and New York. Having acquired bankrupt undersea cable carrier Asia Global Crossing - renamed Asia Netcom - two years ago, Netcom became the only Chinese carrier to own a telecommunications business outside the country. Now it hopes to use Asia Netcom to tap the into the Asia-Pacific region's estimated US$3 billion international data revenues. 'In the Asia-Pacific region, we target business and carrier customers with significant demands for China-related or cross-regional telecommunications services,' Netcom said in its filing to the US Securities and Exchange Commission. 'As China becomes increasingly integrated with the rest of the Asia-Pacific region through trade, commerce and other activities, demand for cross-border telecommunications service by Chinese enterprises operating overseas and foreign companies operating in China is expected to increase significantly.' A source said Netcom was looking into other expansion opportunities abroad either through acquisition or business co-operation with foreign partners. Part of its regional expansion plan is illustrated by its parent China Network Communications Group's talks with PCCW to acquire its fixed-line asset, although the deal has been stalled because of a huge difference in valuation. However, most fund managers still view Netcom as 'just another fixed-line carrier in China'. Netcom is forecasting current full-year profit to reach at least 9.13 billion yuan, which includes an estimated three billion yuan non-cash upfront connection fees. In terms of profit, Netcom is about one-third of China Telecom's scale. After stripping out the non-cash income, Netcom's adjusted full-year profit is expected to exceed 6.5 billion yuan. Despite its regional ambitions, international telecommunications services generated 1.27 billion yuan, or a mere 3.9 per cent of the company's total revenue for the first half of the year. Even Morgan Stanley, which is playing a minor role in Netcom's underwriting syndicate, said the No2 fixed-line carrier's regional growth ambitions were questionable. The US investment bank said in a research report on Netcom to fund managers: 'While China Netcom appears to have paid cents on the dollar in its acquisition of Asia Global Crossing, its addition dilutes earnings in the near term, and possibly ... in the long term', as the undersea cable operator was generating negative ebitda but hoped to turn positive next year.