Analysts say the company will have to cut its offer price significantly if it is to revive the sale successfully. The Ministry of Information Industry's attempt to bolster China Telecom's profitability by imposing an 8.5-fold rise in IDD interconnection fees for overseas carriers seems to have backfired, causing concern among investors about regulatory interference.

China Telecom had said it would sell 16.8 billion shares to global investors at $1.47 to $1.69 a share to raise between HK$24.7 billion and HK$28.4 billion. Brokers said the company would now have to cut the size of its offer by anything from 20% to 50% to get it away, as well as trimming the price.

However, the price is already only just above book value, and it is thought that a reduction below book would require government consent, something that is not guaranteed. Co-sponsor Morgan Stanley told clients that the sale was being delayed due to the need to address some regulatory hudles.