Starting on Friday, Hong Kong phone companies must pay eight times more to connect international calls to networks run by China Telecommunications Corp., the country's biggest phone company.

　　The price was announced in a letter from China Telecom to its Hong Kong counterparts, reported Bloomberg News. The letter said Ministry of Information Industry has ordered China Telecom to charge at least 17 U.S. cents a minute for calls made to China, a huge increase over the current charge of 2 U.S. cents a minute.

　　Many industry analysts see the move as an attempt by China Telecom to improve its future revenue stream insgroupsto impress investors as it prepares to launch an initial public offering on stock markets in New York and Hong Kong.

　　"This goes against the global trend of lowering termination charges. I think China Telecom did this to attract more investors to its initial public offering," said Andrew Chetham, a telecom analyst with Gartner Hong Kong, noting that response to the IPO has been poor so far.

　　"Inevitably, Hong Kong customers will pay more to make calls to the mainland, as many phone companies in the city have announced they will increase charges," Chetham noted. "People can hardly go around China Telecom's network, which provides the last mile connection to most mainland users."

　　Industry insiders note the charge for calls from Hong Kong to the mainland used to be 17 U.S. cents per minute before China opened its telecom market. As more operators competed to connect overseas callers to the mainland, the price dropped to its current level.

　　Raising charges may boost China Telecom sales. The company hopes to raise US.68 billion from its Hong Kong and New York listings of a unit which operates phone networks in Shanghai and the provinces of Zhejiang, Jiangsu and Guangdong, the company's four most profitable southern areas.

　　The mainland is the biggest destination for Hong Kong long-distance calls. In the first eight months of 2002, Hong Kong callers made 4.3 billion minutes of outgoing calls to overseas, almost a third of which went to the mainland, Bloomberg News reported.

　　"It will make China Tele-com more charming to investors," said Lian Mengke, a telecom analyst with Hai Tong Securities, noting that the company's fixed-line business model lacks the appeal mobile telecom operators China Mobile and China Unicom had when they listed overseas.

　　Both analysts said people should pay attention to the response of China Netcom, a major competitor of China Telecom, which operates in the country's 10 northern provinces.

　　"As happened in other countries, China Netcom and other operators could try to ask overseas customers to call them first and relay the signals to China Telecom's network, which would be charged as local calls," Chetham said.