CHINA Telecom Ltd. is expected to sell 16.7 billion shares in an initial public offering for US$3.4-4 billion, sources close to the deal said Tuesday.

　　This indicates a price range of HK$1.59 to HK$1.87 per share, at the middle to high end of a HK$1.00-2.00 price range given by market sources last week. The IPO shares account for about 20 percent of the company’s issued capital.

　　About 10 percent are existing shares and proceeds from the sale of those will meet the company’s social security obligations, sources with the company said.

　　China International Capital Corp. (CICC), one of the three lead managers of the deal, said in a research report this week that it forecasts China Telecom’s 2002 net income at 16.53 billion yuan (US$2 billion).

　　China Telecom should have adjusted revenue growth at a compound annual rate of 9.2 percent, and an adjusted core earnings rate of 11.2 percent between 2001 and 2004, CICC said.

　　But the investment bank warned investors that revenue from long-distance calls has been declining since 1999 and said this could pressure profitability.

　　(SD-Agencies)