XN000022-1988-11-07 — Page 5

MONDAY, NOVEMBER 7, 1988

IN CONNECTION WITH THE PROPOSED COMBINED FORECAST OF HONG KONG TELECOM HAS BEEN PREPARED.

OFFER, A PROFIT

THE DIRECTORS ARE FORECASTING THAT, ON CERTAIN BASES AND ASSUMPTIONS WHICH WILL BE SET OUT IN THE PROSPECTUSES FOR THE COMBINED OFFER AND IN THE ABSENCE OF UNFORESEEN CIRCUMSTANCES, THE PROFIT ATTRIBUTABLE TO SHAREHOLDERS OF HONG KONG TELECOM FOR THE YEAR ENDING MARCH 31, 1989 IS UNLIKELY TO BE LESS THAN HK$3,590 MILLION.

THIS WOULD REPRESENT HK$0.323 PER SHARE ON THE BASIS OF 11,099,274,768 SHARES, BEING THE WEIGHTED AVERAGE NUMBER OF SHARES EXPECTED TO BE IN ISSUE FOR THAT YEAR, EXCLUDING ANY SHARES WHICH MAY BE ISSUED PURSUANT TO THE SCRIP DIVIDEND SCHEME IN RESPECT OF THE HONG KONG TELECOM INTERIM DIVIDEND.

THE PROFIT FORECAST

TAKES INTO ACCOUNT AN INCREASE.

WITH

EFFECT FROM OCTOBER 1, 1988, IN THE RATE OF ROYALTY PAYABLE TO HONG KONG GOVERNMENT BY CABLE AND WIRELESS (HONG KONG) LIMITED UNDER ITS LICENCE TO 9 PER CENT FROM THE PREVIOUS RATE OF 7 PER CENT WHICH HAD BEEN UNCHANGED SINCE 1981. THE NEW RATE OF ROYALTY WILL NEXT BE SUBJECT TO REVIEW AFTER FIVE YEARS, IN 1993.

DIVIDEND FORECAST

OF

THE

ΤΟ

IN

ON THE BASIS OF THE PROFIT FORECAST AND TAKING ACCOUNT INTERIM DIVIDEND OF HK$0.11 PER SHARE, THE DIRECTORS INTEND RECOMMEND A FINAL DIVIDEND OF HK$0.115 PER SHARE, PAYABLE SEPTEMBER 1989, IN RESPECT OF THE YEAR ENDING MARCH 31, 1989.

THIS WOULD REPRESENT A DISTRIBUTION OF 70 PER CENT OF THE COMPANY'S EARNINGS AVAILABLE FOR DISTRIBUTION TO SHAREHOLDERS IN RESPECT OF THE YEAR ENDING MARCH FORECAST.

31, 1989, BASED UPON THE PROFIT

FINANCIAL ADVISERS AND UNDERWRITERS

PURDENTIAL ASIA CAPITAL LIMITED IS ACTING AS THE FINANCIAL ADVISER TO CWFE AND BARING BROTHERS & Co., LIMITED AS THE FINANCIAL ADVISER TO FSI.

IT IS INTENDED THAT THE HONG KONG OFFER WILL BE UNDERWRITTEN BY PRUDENTIAL ASIA CAPITAL LIMITED, BARING BROTHERS & CO., LIMITED AND WARDLEY CORPORATE FINANCE LIMITED.

U.S. OFFER WILL

IT IS INTENDED THAT THE LEAD MANAGERS OF THE BE PURDENTIAL-BACHE CAPITAL FUNDING, BARING SECURITIES INC., GOLDMAN, SACHS & CO. AND MERRILL LYNCH CAPITAL MARKETS AND THAT THE LEAD MANAGERS OF THE INTERNATIONAL OFFER WILL BE PRUDENTIAL-BACHE CAPITAL FUNDING AND BARING BROTHERS & CO., LIMITED.

/BY ORDER