Dated 5 December, 2001, the letter claimed the job cuts were a 'direct result of the extremely difficult economic situation in Hong Kong and globally, and of intense competition within our industry arising since the implementation of the current regulatory framework.'

In August last year, PCCW bought Hong Kong Telecom and agreed not to make any job cuts for one year but soon after the deadline expired 340 jobs were axed. This second round of 506 job cuts wrote Richard Li may not be the company's final redundancies but in an attempt to stave off the possibility wages will be frozen and there will be no job vacancies for a year.

'It is not possible to give assurances that there will be no further redundancies. However, to minimize the impact on employment within the PCCW Group we will implement immediately a wage and headcount freeze for the next year,' he pledged.

PCCW's share price has this week risen by 1.15 per cent to HK$1.63 from a low at the beginning of September. Shares fell dramatically after the Hong Kong Telecom acquisition over fears that PCCW had landed itself in debt to the tune of US$4 billion some of which is due to be repaid within the next three years.

However, the share price increase is likely due to the company's successful refinancing of the debt through two bond issues worth around $1.25 billion with maturities of between ten to thirty years.

According to the Financial Times, Nigel Coe, telecoms analyst with Deutsche Bank in Hong Kong, commented in a research note: 'We believe the company only needs to raise a further $1 billion to $1.5 billion, which it should accompllish over the next 12 months.'