Hong Kong's dominant fixed line telephone carrier PCCW announced it was in talks to sell a 20% stake to China Netcom. Xinhua news agency quoted analysts estimating the deal would be worth around US$844m, based on PCCW's current market value. A China Netcom spokesman confirmed the talks, telling the agency the two parties would "explore various business cooperation possibilities". Proceeds from the sale would likely to be used to reduce PCCW's debt, which stood at more than US$3.7bn in the first half of this year. China Netcom is the smallest of China's four largest telecommunication groups and has been looking to expand its business from its north China base where it has been suffering from declining margins due to fierce competition.