Exhibit 4(u)


                                                                 Conformed Copy
                                  PCCW LIMITED
               (Incorporated in Hong Kong with limited liability)


      US$54,377,474.94 5% MANDATORY CONVERTIBLE NOTE DUE 2005 (the "Note")


Date:  28 June 2002                                            Serial Number: 1

Issued pursuant to the Memorandum and Articles of Association of PCCW Limited
(formerly known as Pacific Century CyberWorks Limited) (the "Company") and
resolutions of its Board of Directors passed on 27 June 2002 and of the
Executive Committee of its Board of Directors passed on 8 April 2003.

This Note is amended and restated with effect from 25 April 2003 in accordance
with Condition 16 hereof pursuant to a First Supplemental Deed entered into
between the Company, Pacific Century Cable Holdings Limited and the Noteholder
(as defined in the terms and conditions endorsed on this Note (the
"Conditions")) dated 15 April 2003.

The Company hereby certifies that Telstra Corporation Limited (ABN 33 051 775
556) of 242 Exhibition Street, Melbourne, Victoria, Australia is the duly
registered holder of this Note which is issued with the benefit of and subject
to the Conditions. The Company undertakes to the Noteholder to observe and
perform its obligations under the Note. On the Maturity Date (as defined in the
Conditions), the Note shall, subject to the Conditions, be redeemed by
conversion into the Conversion Shares (as defined in the Conditions) of the
Company.

IN WITNESS whereof this Note has been executed by the Company and is intended
to be and is hereby delivered on the date appearing above and shall take effect
as a deed poll for the benefit of the Noteholder.



THE COMMON SEAL of the Company      )
was hereto affixed by               )
in the presence of:                 )
                                    )                           C.S.
                                    )
                                    )
                                    )
/s/ Kwok Ching Carmen                       /s/ Alexander Anthony Arena
--------------------------------            ---------------------------------
Signature                                   Director

KWOK CHING CARMEN
HOUSE 8, 12th STREET,
HONG LOK YUEN, TAI PO                       /s/ Fiona Nott
--------------------------------            ---------------------------------
Name and Address                            Director/Secretary

This Note is transferable only to the extent permitted by Condition 2 of the
Conditions. This Note must be delivered to the Secretary of the Company for
cancellation and reissue of an appropriate certificate in the event of any such
transfer.


                                       1
<PAGE>


                        TERMS AND CONDITIONS OF THE NOTE

The Noteholder (as defined below) is entitled to the benefit of, and is bound
by, and is deemed to have notice of, the terms and conditions set out below.
This Note shall be held subject to and with the benefit of such terms and
conditions. In this Note, words and expressions shall have the meanings
attributed to them below unless the context otherwise requires:-

"Accretion Date"              30 June, 30 September, 30 December and 31 March
                              in each year from 30 September 2002 to the
                              Maturity Date (both dates inclusive), or, if any
                              such date is not a Business Day, the next
                              following day thereafter which is a Business Day;

"Accretion Period"            each successive period beginning on an Accretion
                              Date (or, in the case of the first Accretion
                              Period, the Issue Date) and ending on the next
                              succeeding Accretion Date (or, in the case of the
                              last Accretion Period, the Maturity Date);

"Amendment and Restatement    the amendment and restatement agreement dated 15
Agreement"                    April 2003 between Reach Finance Limited as
                              borrower, Reach Ltd., Reach Networks Hong Kong
                              Limited, Reach Networks Australia Pty Limited,
                              Reach Global Networks Limited and Reach Global
                              Services Limited as guarantors and JPMorgan Chase
                              Bank as facility agent and security trustee;

"Auditors"                    the auditors for the time being of the Company or
                              if they are unable or unwilling to carry out any
                              action requested of them under these Conditions,
                              such other firm of reputable international
                              accountants as may be nominated by the Company
                              for the purpose;

"Alternative Stock Exchange"  the stock exchange (other than the Stock
                              Exchange) of at least similar international
                              standing to the Stock Exchange on which the
                              Shares, if not then listed on the Stock Exchange,
                              are listed;

"Business Day"                a day (excluding Saturday) on which banks in Hong
                              Kong, New York City and Sydney are open for
                              business;

"Certificate"                 the certificate in or substantially in the form
                              to which these Conditions are endorsed and issued
                              in the name of the Noteholder and includes any
                              replacement certificates issued pursuant to these
                              Conditions;

"Companies Ordinance"         the Companies Ordinance, Chapter 32 of the Laws
                              of Hong Kong;

"Conditions"                  the terms and conditions attached to or endorsed
                              on this Note, and "Condition" refers to the
                              relevant numbered paragraph of these Conditions;

"Conversion Date"             has the meaning ascribed thereto in Condition
                              6.1;

"Conversion Event"            has the meaning ascribed thereto in Condition
                              6.2;

"Conversion Event Notice"     means a notice from the Noteholder to the Company
                              in accordance with Condition 15 following the
                              occurrence of a Conversion Event and specifying
                              the relevant Conversion


                                       2
<PAGE>

                              Event in reasonable detail, the form of which is
                              set out in Schedule 4 to these Conditions;

"Conversion Notice"           the written notice given by the Noteholder to the
                              Company in connection with the conversion of this
                              Note pursuant to Condition 7.1, the form of which
                              is set out in Schedule 1 to these Conditions;

"Conversion Shares"           the Shares to be issued by the Company under this
                              Note (whether on the Conversion Date or Maturity
                              Date);

"Deposit Date"                has the meaning ascribed thereto in Condition
                              7.2(B);

"Event of Default"            has the meaning ascribed thereto in Condition 11;

"Expiry Date"                 has the meaning ascribed to it in Condition 7.4

"Hong Kong"                   the Hong Kong Special Administrative Region of
                              the People's Republic of China;

"Hong Kong dollars",          the lawful currency of Hong Kong;
"Hong Kong cents" and "HK$"

"Initial Noteholder"          Telstra Corporation Limited of 242 Exhibition
                              Street, Melbourne, Victoria, Australia;

"Interest Amount"             has the meaning ascribed thereto in Condition
                              3.2;

"Issue Date"                  means the date first above appearing on page 1
                              hereof;

"Listed Shares"               means Shares which are listed for trading on the
                              Stock Exchange (or the Alternative Stock
                              Exchange);

"Maturity Date"               means 30 June 2005;

"Note"                        this mandatory convertible Note in the principal
                              amount of US$54,377,474.94;

"Noteholder"                  the person in whose name this Note is registered
                              in the Register of this Note (including the
                              Initial Noteholder);

"Principal Amount"            the amount in US$ equal to the outstanding
                              principal amount of this Note from time to time
                              (excluding any unpaid interest accrued thereon
                              but not added to such principal amount in
                              accordance with Condition 3.2, and any other sums
                              due but unpaid thereon);

"Principal Subsidiary"        means at any time any Subsidiary of the Company:

                              (a)  whose profits, or (in the case of a
                                   Subsidiary which has subsidiaries)
                                   consolidated profits, before taxation and
                                   extraordinary items as shown by its latest
                                   audited profit and loss account exceed 10%
                                   of the consolidated profits before taxation
                                   and extraordinary items of the Company and
                                   its Subsidiaries as shown by the latest
                                   published audited consolidated profit and
                                   loss account of the Company and its
                                   Subsidiaries; or


                                       3
<PAGE>

                              (b)   whose total assets or (in the case of a
                                    Subsidiary which has subsidiaries) total
                                    consolidated assets as shown by its latest
                                    audited balance sheet are at least 10% of
                                    the total consolidated assets of the Company
                                    and its Subsidiaries as shown by the then
                                    latest published audited consolidated
                                    balance sheet of the Company and its
                                    Subsidiaries; or

                              (c)   to which is transferred the whole or
                                    substantially the whole of the assets and
                                    undertaking of a Subsidiary of the Company
                                    which immediately prior to such transfer is
                                    a Principal Subsidiary, provided that, in
                                    such a case, the Subsidiary so transferring
                                    its assets and undertaking shall thereupon
                                    cease to be a Principal Subsidiary.

                              A report by the Auditors that, in their opinion,
                              a Subsidiary is or is not or was or was not at
                              any particular time a Principal Subsidiary shall,
                              in the absence of manifest error, be conclusive
                              and binding on all parties concerned. References
                              to the latest published audited profit and loss
                              account and balance sheet of a Subsidiary which
                              has subsidiaries shall be construed as references
                              to the latest published audited consolidated
                              profit and loss account and consolidated balance
                              sheet of such Subsidiary and its subsidiaries
                              (which are prepared in accordance with generally
                              accepted accounting principles in the relevant
                              country of incorporation), if such are required
                              to be produced, or if no such profit and loss
                              account or balance sheet are produced, to a pro
                              forma profit and loss account or balance sheet,
                              prepared for the purpose of such report.

                              References to accounting terms include (where
                              appropriate) reference to other accounting terms
                              in respect of like items, as determined by the
                              Auditors;

"Proceedings"                 means any legal action or proceedings arising out
                              of or in connection with this Note;

"Reach Facility Agreement"    means the amended and restated syndicated term
                              loan facility agreement (in the form set out in
                              schedule 4 to the Amendment and Restatement
                              Agreement, as amended from time to time) relating
                              to borrowings of US$1,200,000,000 by Reach
                              Finance Limited, a special purpose finance entity
                              of Reach Ltd., and each of every facility
                              agreement or financing arrangement entered into
                              for the purpose of refinancing all or a
                              significant part of such syndicated term loan
                              facility;

"Redemption Amount"           the amount in US$ payable by the Company upon the
                              redemption of this Note, being the sum of the
                              Principal Amount outstanding at the relevant
                              Redemption Date plus any unpaid interest accrued
                              thereon but not added to such Principal Amount in
                              accordance with Condition 3.2 and including any
                              sums due but unpaid thereon;

"Redemption Date"             any date (including the Conversion Date) on which
                              this Note falls due for redemption in accordance
                              with these Conditions;


                                       4
<PAGE>
"Register"                    means the register maintained by the Company in
                              respect of this Note;

"Shareholder"                 a person in whose name a Share is registered from
                              time to time;

"Shares"                      the ordinary shares of HK$0.25 each in the share
                              capital of the Company existing on the date
                              hereof and all other (if any) stock or shares
                              from time to time and for the time being ranking
                              pari passu therewith and all other (if any) stock
                              or shares or other securities (however described)
                              resulting from any sub-division, consolidation or
                              re-classification thereof;

"Stock Exchange"              The Stock Exchange of Hong Kong Limited;

"Subsidiary"                  any subsidiary of the Company, HKTC (as defined
                              in Condition 6.2(A)) or, the case may be, the
                              Initial Noteholder and for this purpose
                              "subsidiary" has the meaning ascribed thereto (in
                              the case of the Company and HKTC) in the
                              Companies Ordinance and (in the case of the
                              Initial Noteholder) in the Corporations Act 2001
                              of Australia;

"Telstra Group"               means the Initial Noteholder and all of its
                              Subsidiaries which are included (in their
                              capacity as such) from time to time in the
                              audited consolidated accounts of the Initial
                              Noteholder;

"Telstra Group Noteholder"    means the Initial Noteholder and any member of
                              the Telstra Group to which this Note has been
                              transferred pursuant to Condition 2.3(B);

"Trading Day"                 means a day on which the Stock Exchange (or any
                              Alternative Stock exchange, as the case may be)
                              is open for business;

"Transfer Form"               has the meaning ascribed thereto in Condition
                              2.4(A);

"United States dollars",
"US dollars" and "US$"        the lawful currency of the United States of
                              America; and

"Volume Weighted Average
Price"                        means for the purpose of Condition 6.3 in respect
                              of a Listed Share, the volume weighted average of
                              the price of all transactions concluded by
                              automatic order matching under the Automatic
                              Order Matching and Execution System of the Stock
                              Exchange (or the equivalent system of the
                              Alternative Stock Exchange, as the case may be)
                              for Listed Shares, for the most recent twenty
                              Trading Days prior to the Conversion Date or the
                              Maturity Date, as the case may be, being
                              transactions reported by and details of which are
                              available from the Stock Exchange (or the
                              Alternative Stock Exchange); provided that if at
                              any time during the said twenty Trading Days the
                              Listed Shares shall have been quoted ex-dividend
                              and during some other part of that period, the
                              Listed Shares shall have been quoted cum-dividend
                              then:

                              (a)   if the Listed Shares to be issued or
                                    purchased do not rank for the dividend in
                                    question, the quotations on the dates on
                                    which the Listed Shares shall have been

                                       5
<PAGE>

                                    quoted cum-dividend shall for the purpose of
                                    this definition be deemed to be the amount
                                    thereof reduced by an amount equal to the
                                    amount of that dividend per Listed Share;
                                    and

                              (b)   if the Listed Shares to be issued or
                                    purchased rank for the dividend in question,
                                    the quotations on the dates on which the
                                    Listed Shares shall have been quoted
                                    ex-dividend shall for the purpose of this
                                    definition be deemed to be the amount
                                    thereof increased by an amount equal to the
                                    amount for that dividend per Listed Share,

                              and provided further that if the Listed Shares on
                              each of the said twenty Trading Days have been
                              quoted cum-dividend in respect of a dividend
                              which has been declared or announced but the
                              Listed Shares to be issued or purchased do not
                              rank for that dividend, the quotations on each of
                              such dates shall for the purpose of this
                              definition be deemed to be the amount thereof
                              reduced by an amount equal to the amount of that
                              dividend per Listed Share;

                              The Company shall determine the Volume Weighted
                              Average Price in its sole discretion acting in
                              good faith and in a reasonable manner, and in the
                              event that the Noteholder disputes such
                              determination the Company and the Noteholder
                              shall jointly appoint an independent investment
                              bank with its headquarters located in London,
                              acting as expert, to determine the Volume
                              Weighted Average Price and a certificate or
                              report of such bank shall in the absence of
                              manifest, error be conclusive and binding on the
                              Company and the Noteholder.

                              Notwithstanding anything contained herein the
                              Volume Weighted Price shall in no circumstances
                              be less than the par value of the Shares.

The expressions "Company" and "Noteholder" shall, where the context permits,
include their respective successors and permitted assigns and any persons
deriving title under them.

In this Note, unless the context requires otherwise:

(A)  words importing the singular include the plural and vice versa;

(B)  words importing a gender or the neuter include both genders and the
     neuter;

(C)  references to this Note or any other document shall be construed as
     references to this Note or such document as the same may be amended or
     supplemented from time to time;

(D)  references to any provision of any statute shall be deemed also to refer
     to any statutory modification or re-enactment thereof or any statutory
     instrument, order or regulation made thereunder or under such
     re-enactment;

(E)  references to costs, charges, remuneration or other similar expressions
     shall include value added tax or similar tax charged in respect thereof;

(F)  references to a paragraph, sub-paragraph or Schedule shall be construed as
     references to a paragraph or sub-paragraph of or a Schedule to these
     Conditions;


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<PAGE>

(G)  references to any transfer of this Note by any Telstra Group Noteholder
     (including, without limitation, any restrictions thereon) shall be
     construed so as to include references to any transfer of any legal or
     beneficial interest of such Telstra Group Noteholder in this Note and
     references to any Telstra Group Noteholder remaining a Noteholder shall be
     construed as references to such Telstra Group Noteholder retaining all
     legal and beneficial interests in this Note; and

(H)  references to any action, remedy or method or judicial proceedings for the
     enforcement of rights of creditors shall be deemed to include, in respect
     of any jurisdiction other than England, references to such action, remedy
     or method or judicial proceedings for the enforcement of rights of
     creditors available or appropriate in such jurisdiction as shall most
     nearly approximate thereto.

Condition headings are inserted for reference only and shall be ignored in
construing these Conditions.

1.   FORM AND STATUS

1.1  The principal amount of this Note shall be US$54,377,474.94. This Note is
     represented by the Certificate without interest coupons attached. The
     Noteholder will be entitled to one Certificate for the Principal Amount of
     this Note registered in its name. The Certificate shall bear a serial
     number and shall be executed by the Company.

1.2  This Note constitutes direct unconditional, unsubordinated and unsecured
     obligations of the Company. The payment obligations of the Company under
     the Note shall, save for such exceptions as may be provided by mandatory
     provision of applicable law, at all times rank at least equally with all
     of its other present and future unsecured and unsubordinated obligations.

1.3  The Noteholder may not exercise or claim any right of set-off in respect
     of any amount owed to it by the Company arising under or in connection
     with this Note.

2.   TRANSFER

2.1  Subject to the conditions, approvals, requirements and any other
     provisions of or under (i) the Stock Exchange (or, as the case may be, any
     Alternative Stock Exchange) or their rules and regulations and (ii) all
     applicable laws and regulations, this Note may be assigned or transferred
     if, and only if, the assignment or transfer is in accordance with the
     provisions of this Condition 2.

2.2  Any transfer of this Note shall be in respect of the whole (and not part
     only) of the Principal Amount of this Note from time to time. Title to the
     Note passes only by registration in the Register. The Noteholder will
     (except as otherwise required by law) be treated as the absolute owner of
     this Note for all purposes (whether or not it is overdue and regardless of
     any notice of ownership, trust or any interest in it or any writing on, or
     the theft or loss of, the Certificate issued in respect of this Note) and
     no person will be liable for so treating the Noteholder.

2.3  (A)  Subject to sub-paragraph (B) below, a Telstra Group Noteholder may
          only transfer this Note in accordance with this Condition 2 if such
          Telstra Group Noteholder shall have given written notice (the
          "Transfer Notice") to the Company in accordance with Condition 15
          (which notice shall be irrevocable) stating its intention to transfer
          this Note and the date of the proposed transfer which shall be a date
          falling not less than twenty Business Days after the date of the
          Transfer Notice (the "Transfer Date").


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<PAGE>

     (B)  (i)  A Telstra Group Noteholder may at any time transfer the whole
               (but not part only) of this Note (i) within the Telstra Group
               without the consent of the Company or (ii) to any party outside
               the Telstra Group with the prior written consent of the Company
               (acting in its absolute discretion), all in accordance with this
               Condition 2. Where any Telstra Group Noteholder ceases to be a
               member of the Telstra Group after the date on which it becomes a
               Noteholder hereunder, such Telstra Group Noteholder undertakes
               to the Company (in the case of the Initial Noteholder, by its
               subscription for this Note and, in the case of any subsequent
               Telstra Group Noteholder, by its execution of the Transfer Form)
               that it shall procure that, on or prior to the date on which it
               ceases to be a member of the Telstra Group, all of its legal and
               beneficial interest in this Note shall be transferred to a
               company which is at the relevant date a member of the Telstra
               Group (unless the Company otherwise consents, in its absolute
               discretion, to such Noteholder not effecting such transfer).

          (ii) Notwithstanding any provision in these Conditions, no purported
               transfer of this Note shall be permitted nor shall be effective
               if the result of such purported transfer is that this Note is or
               is considered by the Company to be capable of being quoted,
               listed, dealt in or traded on any stock exchange,
               over-the-counter market or other centrally organised or
               regulated securities market.

2.4  In relation to any transfer of this Note permitted under or pursuant to
     this Condition 2:

     (A)  this Note may only be transferred by execution of a form of transfer
          in the form set out in Schedule 2 to these Conditions (the "Transfer
          Form") under the hand of the transferor and the transferee (or their
          duly authorised representatives) or, where either the transferor or
          transferee is a corporation, under its common seal (if any) and under
          the hand of one of its officers duly authorised in writing or
          otherwise executed by a duly authorised officer thereof. By its
          execution of the Transfer Form, the transferee will be deemed to have
          given the undertakings, acknowledgement, representations, warranties
          and confirmations specified in these Conditions as a Noteholder and,
          if relevant, as a Telstra Group Noteholder and shall be bound by the
          Conditions accordingly; and

     (B)  the Certificate must be delivered to the Company for cancellation
          accompanied by (i) a duly completed and executed Transfer Form; (ii)
          in the case of the execution of the Transfer Form on behalf of a
          corporation by its officers, evidence of the authority of that person
          or those persons to do so; and (iii) such other evidence as the
          Company may reasonably require (including, without limitation, as to
          capacity) as to due execution of the Transfer Form by or on behalf of
          the Noteholder, in each case in form and substance reasonably
          satisfactory to the Company.

2.5  The Company shall as soon as possible but in any event within ten Business
     Days of receipt of all the documents specified in Condition 2.4(B), cancel
     the existing Certificate and issue a new Certificate under the seal of the
     Company in favour of the transferee. Such new Certificate shall be made
     available for collection at the registered office of the Company or, if so
     requested, be posted by uninsured mail at the risk of the holder entitled
     to this Note to the address specified in the Transfer Form as soon as
     possible but in any event within ten Business Days after receipt of the
     said documents.

2.6  All reasonable legal and other costs and expenses which may be properly
     incurred by the Company in connection with any transfer or assignment of
     this Note or any request therefor shall be borne by the transferring
     Noteholder.


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<PAGE>

3.   INTEREST

3.1  This Note shall bear interest on its Principal Amount from and including
     the Issue Date to but excluding the Conversion Date or the Maturity Date,
     as the case may be, (except as provided in Condition 3.3) at the rate of
     5% per annum.

3.2  Interest shall accrue on the Principal Amount of this Note from and
     including the Issue Date to but excluding the first Accretion Date and
     thereafter, from and including one Accretion Date to but excluding the
     next following Accretion Date. Interest shall be calculated in respect of
     the Principal Amount outstanding as at the last day of the relevant
     Accretion Period (or as at the relevant Redemption Date in respect of any
     portion thereof due to be redeemed on a date which is not an Accretion
     Date in accordance with these Conditions) and on the basis of the actual
     number of days elapsed in the relevant Accretion Period (or the number of
     days elapsed from the last preceding Accretion Date to (but excluding) the
     Conversion Date or Redemption Date, as the case may be) divided by 360.

     Each such interest amount (an "Interest Amount") is payable to the
     Noteholder in arrear on the relevant Accretion Date, but (for valuable
     consideration, the receipt of which is hereby acknowledged by the Initial
     Noteholder and will, by its execution of the Transfer Form, be
     acknowledged by any subsequent Noteholder) the Noteholder irrevocably
     directs that the interest which is payable on each Accretion Date is to be
     capitalised and added to the Principal Amount of this Note so as to become
     part of the Principal Amount of this Note, and accordingly shall itself
     accrue interest in respect of each succeeding Accretion Period thereafter.

     The Interest Amount in respect of the Accretion Period ending in June 2003
     only shall be calculated in accordance with this Condition 3 provided
     that:

     (A)  for the period from and including 31 March to but excluding 25 April
          2003 the Principal Amount shall be deemed to be US$197,377,474.94;
          and

     (B)  for the period from and including 25 April 2003 to but excluding the
          Accretion Date falling in June 2003 the Principal Amount shall be
          US$54,377,474.94.

3.3  This Note will cease to bear interest on the earlier of (i) the date on
     which this Note has been repaid or redeemed in full in accordance with
     these Conditions; (ii) the date from which claims on this Note have been
     prescribed pursuant to Condition 11; and (iii) with respect to the
     conversion of the Redemption Amount of this Note in accordance with
     Conditions 6 and 7 on the Conversion Date or, as the case may be, the
     Maturity Date.

     In the event that all of the Conversion Shares cannot be delivered
     pursuant to Condition 7, interest shall continue to accrue only in respect
     of that part of the Principal Amount of the Note which has not been
     redeemed by conversion pursuant to Conditions 6 and 7, from the Conversion
     Date or the Maturity Date to the earlier of the date on which such part of
     the Principal Amount is repaid or redeemed in full in accordance with
     these Conditions and the Expiry Date.

3.4  Notwithstanding the foregoing, if this Note is due for redemption or
     repayment and upon due presentation, payment of all or any part of the
     Redemption Amount is withheld or refused or default is otherwise made in
     respect of such payment, interest will continue to accrue on the amount
     outstanding at the relevant rate as specified in Condition 3.1 plus 1% per
     annum (both after as well as before any judgment) up to but excluding the
     date on which payment is made in full of the Redemption Amount.


                                       9
<PAGE>

4.   PAYMENTS

4.1  (A)  Subject to Condition 4.3, all payments by the Company hereunder shall
          be made on the due date therefor in same day funds free and clear of
          any withholding or deduction for any present or future taxes,
          imposts, levies, duties, assessments or other governmental charges
          imposed or levied in Hong Kong or by any authority or any political
          subdivision thereof having power to tax. In the event that the
          Company is required to make any such deduction or withholding from
          any amount paid hereunder, the Company shall pay to the Noteholder
          such additional amount ("additional amount") as shall be necessary so
          that the Noteholder receives a net amount equal to the full amount
          which it would have received if such withholding or deduction had not
          been made. When making payments to the Noteholder, fractions of one
          cent will be rounded down to the nearest cent.

     (B)  Notwithstanding the foregoing, the obligation of the Company to pay
          such additional amount shall not apply with respect to (i) any taxes
          imposed on the overall net income of the Noteholder arising from the
          carrying on of business or trade in Hong Kong, or (ii) any estate,
          inheritance, gift, sales, transfer or personal property tax or any
          similar taxes, duties, assessments or other governmental charges, or
          (iii) any taxes, duties, assessments or other governmental charges
          that are payable otherwise than by deduction or withholding from
          payments on this Note.

     (A)  (C) In the event that any additional amount actually paid with
          respect to this Note are based on rates of deduction or withholding
          in excess of the appropriate rate applicable to the Noteholder, and,
          as a result thereof, the Noteholder is entitled to make a claim for a
          refund or credit of such excess, then the Noteholder shall, by
          accepting this Note, be deemed to have agreed to make all reasonable
          efforts to submit any such claim for a refund or credit of such
          excess and to pay the amount recovered (or other benefit received) in
          respect thereof to the Company forthwith after receipt. The
          Noteholder shall give reasonable assistance to the Company to
          maximize the recovery of any additional amount paid by the Company
          under Condition 4.1(A) but without any liability on the part of the
          Noteholder to incur any additional obligations (whether for tax or
          otherwise) in order to provide such assistance.

     (D)  References in these Conditions to principal and interest shall be
          deemed also to refer to any additional amount which may be payable in
          respect thereof under this Condition.

4.2  (A)  All payments by the Company shall be made in US dollars (other than
          any Equivalent Amount payable pursuant to Condition 6.5) by the
          opening of business in the relevant place of payment on the due date
          by remittance by wire transfer in immediately available funds to such
          bank account as the Noteholder may notify the Company in writing from
          time to time in accordance with Condition 15 (such notice to be given
          not less than five Business Days prior to the due date for the
          relevant payment) provided that the Noteholder shall be responsible
          for (and the Company shall make no additional payment in respect of)
          any loss of interest paid in respect of this Note due to it giving
          inaccurate or late remittance instructions.

     (B)  The Company shall deliver (or procure there to be delivered) to the
          Noteholder in accordance with Condition 15 at least one Business Day
          prior to the due date for payment hereunder a copy of the irrevocable
          instructions issued to its bankers responsible for remitting the
          relevant sums due hereunder to the Noteholder directing such
          remittance to be made to the Noteholder's accounts notified to the
          Company in accordance with Condition 4.2(A) provided that no delay in
          or non-compliance with the Company's delivery obligations under this
          Condition 4.2(B)


                                      10
<PAGE>

          shall constitute or give rise to any default or any breach of the
          Company's obligations under this Note.

4.3  If the due date for payment of any amount in respect of this Note is not a
     Business Day, the Noteholder shall be entitled to payment on the next
     following Business Day but shall not be entitled to be paid any interest
     or other amount in respect of any such delay.

5.   MATURITY

     Except to the extent (if any) that this Note has been previously redeemed
     or converted or purchased and cancelled under the terms of these
     Conditions, this Note shall be redeemed in full on the Maturity Date by
     the conversion of the Redemption Amount into the relevant number of
     Conversion Shares subject to and in accordance with Condition 6. This Note
     may not be repaid or otherwise redeemed or transferred or converted other
     than in accordance with these Conditions.

6.   CONVERSION

6.1  On the thirtieth day (such date being the "Conversion Date") after the
     date of the delivery of the Conversion Event Notice, this Note shall be
     redeemed in full by the conversion of the Redemption Amount into the
     relevant number of Conversion Shares subject to and in accordance with
     Condition 6.

6.2  Each of the following shall constitute a Conversion Event:

     (A)  if at any time the Company shall cease to own 50.1 per cent. of the
          issued voting capital of PCCW-HKT Telephone Limited ("HKTC") (other
          than as a result of a consolidation, amalgamation or merger in which
          substantially all of the assets of HKTC continue to be owned or
          controlled by the Company or by a company or companies at least 50.1
          per cent. of the issued share capital of which is or are controlled
          by the Company); or

     (B)  HKTC and its Subsidiaries cease to carry on as their principal
          business, the business of providing fixed line telecommunication
          services in Hong Kong; or

     (C)  the appointment of a liquidator or other insolvency administrator to
          Reach Ltd. or Reach Finance Limited; or

     (D)  a resolution is passed or an order of a court of competent
          jurisdiction is made that Reach Ltd. or Reach Finance Limited be
          wound up or dissolved otherwise than (i) for the purposes or pursuant
          to and followed by a consolidation or amalgamation with a merger into
          Reach Ltd. or any of its subsidiaries or reconstruction or
          reorganisation of Reach Ltd. or Reach Finance Limited; or (ii) for
          the purposes of or pursuant to and followed by a consolidation,
          amalgamation, merger, reconstruction or reorganisation (other than as
          described in (i) above) the terms of which shall have previously been
          approved in writing by the Noteholder, which approval shall not be
          unreasonably withheld or delayed; or

     (E)  the Facility Agent (as defined in the Reach Facility Agreement)
          declares that an amount equal to the Total Amount Owing (as defined
          in the Reach Facility Agreement) is (i) immediately due for payment;
          or (ii) payable on demand and such declaration is not withdrawn
          within 21 days after the giving of such declaration or a demand for
          payment is subsequently made.

6.3  The number of Conversion Shares to be issued on conversion of this Note
     pursuant to Conditions 5 or 6.1 shall be determined by the Company by
     dividing the Redemption


                                      11
<PAGE>

     Amount by the Volume Weighted Average Price, provided that, for the
     avoidance of doubt no Shares may be issued at less than their par value.

     On the Conversion Date or the Maturity Date, as the case may be:

     (A)  (A) first, the Company shall calculate the Redemption Amount that it
          is liable to pay to the Noteholder as at the Conversion Date or the
          Maturity Date, and

     (B)  (B) second, the Company shall, on behalf of the Noteholder and
          pursuant to an irrevocable direction given by the Noteholder to the
          Company (for valuable consideration, the receipt of which is hereby
          acknowledged by the Initial Noteholder and will, by its execution of
          the Transfer Form, be acknowledged by any subsequent Noteholder),
          apply the Redemption Amount in payment and discharge of the
          subscription moneys payable by the Noteholder to the Company for the
          Conversion Shares due to be issued.

     Following such application the Noteholder shall have no further rights in
     respect of the Redemption Amount or any other amount in respect of this
     Note (other than as provided for in Condition 8) and the Company shall
     have no further rights in respect of the subscription moneys for the
     Conversion Shares (other than as provided for in Condition 8).

6.4  No fraction of a Conversion Share shall be issued on conversion so that
     the number of Conversion Shares to be delivered will be the number of
     Shares determined in accordance with the provisions of Condition 6.3 above
     rounded down, if applicable, to the next lower whole number of Shares and
     no cash payment will be made in respect of any fraction of a Share which
     results from the operation of Condition 6.3.

     Conversion Shares issued upon conversion shall rank pari passu in all
     respects with all other existing Shares outstanding at the Conversion Date
     or the Maturity Date and the converting Noteholder shall be entitled to
     all dividends and other distributions the record date of which falls on a
     date on or after the Conversion Date or the Maturity Date.

6.5  If the record date for the payment of any dividend or other distribution
     in respect of the Conversion Shares is on or after the Conversion Date or
     the Maturity Date, but before the date on which the Conversion Shares are
     issued pursuant to Condition 7.3 or 7.4, the Company will pay to the
     Noteholder an amount (the "Equivalent Amount") in Hong Kong dollars equal
     to any such dividend or other distribution to which it would have been
     entitled had it on that record date been such a shareholder of record and
     will make the payment not later than the Expiry Date, provided that the
     Equivalent Amount shall only be payable in respect of such Conversion
     Shares that are so allotted, issued and credited to the Noteholder in
     accordance with the these Conditions.

     The Equivalent Amount shall be paid by wire transfer to an account of the
     Noteholder notified in writing by the Noteholder to the Company no later
     than five Business Days after the Conversion Date or the Maturity Date in
     accordance with Condition 15 or (failing such notice) by means of a Hong
     Kong dollar cheque drawn on a branch of a bank in Hong Kong and sent to
     the address specified in the Conversion Notice.

6.6  Delivery by the Noteholder to the Company of the Conversion Notice shall
     constitute a representation and warranty by the Noteholder that all steps
     necessary to be taken by it under any relevant laws or rules of the Stock
     Exchange (or, as the case may be, the Alternative Stock Exchange) to
     acquire the Conversion Shares have been taken by it.

7.   PROCEDURE FOR CONVERSION

7.1  The Noteholder shall, not earlier than ten Business Days prior to the
     Conversion Date or the Maturity Date, as the case may be, execute and
     deposit at its own expense during


                                      12
<PAGE>

     normal business hours at the registered office of the Company the
     Conversion Notice together with the Certificate representing this Note. In
     the case of the execution of the Conversion Notice on behalf of a
     corporation by its officer(s), the Noteholder shall at the same time
     deposit evidence of the authority of the relevant person(s) to do so and
     in addition, such Noteholder shall deposit or deliver at its own expense
     at the registered office of the Company such other evidence as the Company
     may reasonably require as to due execution of such Conversion Notice by or
     on behalf of such Noteholder, in each case in form and substance
     reasonably satisfactory to the Company. Notice of any change in the
     registered office of the Company will be given promptly by the Company to
     the Noteholder in accordance with Condition 15.

     If the Conversion Notice is not duly completed or executed or is
     inaccurate, the Company may reject the same and notify the Noteholder
     forthwith of such rejection and any intended conversion shall not be
     treated as taking effect until a duly completed and executed and accurate
     Conversion Notice is deposited with the Company in accordance with this
     Condition 7.1. The Conversion Notice once deposited may not be withdrawn
     without the prior consent in writing of the Company.

7.2  (A)  The Noteholder must promptly upon demand pay to the Company all
          stamp, issue, registration or similar taxes and duties (if any) for
          which the Noteholder or the Company is liable in any jurisdiction
          (other than Hong Kong) consequent upon the conversion of this Note or
          issue or delivery of the Conversion Shares or any other securities,
          property or cash to or to the order of such Noteholder. Except as
          aforesaid, the Company will pay the expenses arising on the issue of
          the Conversion Shares and all charges in connection therewith.

     (B)  The date on which all the documents referred to in Condition 7.1 are
          deposited shall be the "Deposit Date" and such date shall be deemed
          to be the Conversion Date or the Maturity Date, as the case may be.

     (C)  With effect from the Deposit Date, the Company will deem the
          Noteholder to have become the holder of record of the number of
          Conversion Shares to be issued upon such conversion pursuant to these
          Conditions.

7.3  The Conversion Shares shall be allotted and issued by the Company,
     credited as fully paid, to the Noteholder (or as it shall have directed
     (and for the avoidance of doubt, and subject to any provision contained in
     these Conditions, the Initial Noteholder may direct that the Conversion
     Shares be allotted and issued to one of its Subsidiaries)) within 21 days
     after the Deposit Date (the last date of such period being the "Delivery
     Date"), subject to Condition 7.4 below, and certificates representing the
     Conversion Shares to which the Noteholder shall become entitled, subject
     to any applicable limitations then imposed by law or regulation, in
     consequence of such conversion, shall be issued in board lots of 1,000
     Shares and delivered to the Noteholder (at the risk and expense of the
     Noteholder) in accordance with the Noteholder's delivery instructions (or
     in the absence thereof sent by ordinary uninsured mail to the of the
     Noteholder specified in the Register).

7.4  In the event that (i) the Company is required, in compliance with the
     requirements of any law or the Stock Exchange (or the Alternative Stock
     Exchange), to obtain approval from its shareholders for the allotment and
     issue of the Conversion Shares or, (ii) it has not obtained the approval
     from the Stock Exchange (or the Alternative Stock Exchange) for the
     listing of and the permission to deal in the Conversion Shares on or
     before the Delivery Date, the Company shall:

     (A)  on or before the Delivery Date, allot and issue such number of Listed
          Shares for which it has obtained at that time approval to allot and
          issue and for which it has obtained approval from the Stock Exchange
          or the Alternative Stock Exchange for the listing of and permission
          to deal in;


                                      13
<PAGE>

     (B)  use all reasonable endeavours to obtain, as soon as practicable, such
          further authority or approvals as are required for the allotment and
          issue of and listing and permission to deal in the balance of the
          Conversion Shares to be issued pursuant to Condition 6; and

     (C)  in the period from the Delivery Date to the date which is 90 days
          from the Deposit Date (the last day of such period shall be the
          "Expiry Date"), as soon as practicable allot and issue and procure
          the listing of and permission to deal in as many additional Listed
          Shares for which such further authority and approval have been
          obtained as the Company is able, by the use of reasonable endeavours,
          to allot and issue within the period up to and including the Expiry
          Date.

     If the Company has not allotted and issued and procured the listing on the
     Stock Exchange (or the Alternative Stock Exchange) of all the Conversion
     Shares by the Expiry Date, then, it shall pay to the Noteholder on the
     Expiry Date an amount US dollars equal to the difference between the
     amount of the aggregate Volume Weighted Average Prices (converted into US
     dollars at the prevailing spot exchange rate) of the Conversion Shares so
     allotted and issued to the Noteholder and listed on the Stock Exchange (or
     the Alternative Stock Exchange) prior to the Expiry Date and the
     Redemption Amount payable to the Noteholder. For the avoidance of doubt,
     the obligation to make such payment under this paragraph shall arise
     without the Noteholder making a demand in respect of the same.

     In respect of any allotment and issue of Conversion Shares pursuant to
     Condition 7.4 hereof the provisions of Condition 7.3 shall apply mutatis
     mutandis to this Condition 7.4.

7.5  The Company shall only allot and issue Shares as Conversion Shares in
     respect of which it has obtained approval from the Stock Exchange (or the
     Alternative Stock Exchange) to list on the Stock Exchange (or the
     Alternative Stock Exchange) and such Conversion Shares shall only be
     issued on a Trading Day and shall not be issued on a Trading Day on which
     trading in Listed Shares is suspended (whether or not at the Company's
     request).

7.6  To the extent that such approval for listing as referred to herein is not
     obtained at the relevant time or if on the Conversion Date or Maturity
     Date, the Shares shall have ceased to be Listed Shares the provisions
     relating to conversion in Condition 6 and 7 shall not apply and the Note
     shall be redeemed in whole, but not in part only, on the Conversion Date
     and the Maturity Date, as the case may be, by payment by the Company to
     the Noteholder of the Redemption Amount. For the avoidance of doubt, the
     obligation to make such payment shall arise without the Noteholder making
     a demand in respect of the same.

8.   ADJUSTMENT

8.1  In respect of any Subsequent Conversion Shares the following provisions
     shall apply:

     (A)  If the Notional Value exceeds the Aggregate First Day Value, the
          Company shall pay to the Noteholder an amount equal to the difference
          between the Notional Value and the Aggregate First Day Value.

     (B)  If the Aggregate First Day Value exceeds the Notional Value, the
          Noteholder shall pay to the Company an amount equal to the difference
          between the Aggregate First Day Value and the Notional Value.

     (C)  Any amount payable pursuant to this Condition 8.1, as the case may
          be, shall be paid in US dollars within seven days from the Expiry
          Date to the account notified by the payee to the payer of such
          amount. For the purpose of determining the amount of any payment in
          US dollars under this Condition 8 any amount in Hong Kong


                                      14
<PAGE>

          dollars shall be converted into US dollars at the prevailing spot
          exchange rate.

8.2  For the purpose of this Condition 8 the following words shall have the
     meanings ascribed for them below:

          "Subsequent Conversion Shares" means any Conversion Shares allotted
          and issued to the Noteholder after the Delivery Date

          "Notional Value" means an amount equal to the product of the number
          of Subsequent Conversion Shares allotted and issued after the
          Delivery Date and before the Expiry Date multiplied by the Volume
          Weighted Price of all Listed Shares traded on the Stock Exchange (or
          Alternative Stock Exchange) on the Delivery Date or if that day is
          not a Trading Day, the preceding Trading Day.

          "First Trading Day Value" for any Trading Day on which Subsequent
          Conversion Shares are allotted and issued (the "Relevant Trading
          Day"), is an amount equal to the product of the number of Subsequent
          Conversion Shares allotted and issued on that Relevant Trading Day
          multiplied by the Volume Weighted Price of all Listed Shares traded
          on the Stock Exchange (or Alternative Stock Exchange) on that
          Relevant Trading Day.

          (A) "Aggregate First Day Value" shall be the aggregate of the First
          Day Trading Values for all of the Relevant Trading Days.

          (B) "Volume Weighted Price" means, in respect of a Listed Share, the
          volume weighted average of the price of all transactions concluded by
          automatic order matching under the Automatic Order Matching and
          Execution System of the Stock Exchange (or the equivalent system of
          the Alternative Stock Exchange, as the case may be) for Listed Shares
          for the relevant Trading Day on which the calculations referred to
          this Condition 8 are to be made being transactions reported by and
          the details of which are available from the Stock Exchange (or the
          Alternative Stock Exchange); provided that if at any time during the
          said Trading Days the Listed Shares have been quoted ex-dividend and
          during some other part of that period, the Listed Shares shall have
          been quoted cum-dividend then:

          (a)  if the Listed Shares to be issued or purchased do not rank for
               the dividend in question, the quotations on the dates on which
               the Listed Shares shall have been quoted cum-dividend shall for
               the purpose of this definition be deemed to be the amount
               thereof reduced by an amount equal to the amount of that
               dividend per Listed Share; and

          (b)  if the Listed Shares to be issued or purchased rank for the
               dividend in question, the quotations on the dates on which the
               Listed Shares shall have been quoted ex-dividend shall for the
               purpose of this definition be deemed to be the amount thereof
               increased by an amount equal to the amount for that dividend per
               Listed Share,

          and provided that if the Listed Shares on the said Trading Days have
          been quoted cum-dividend in respect of a dividend which has been
          declared or announced but the Listed Shares to be issued or purchased
          do not rank for that dividend, the quotations on each of such dates
          shall for the purpose of this definition be deemed to be the amount
          thereof reduced by an amount equal to the amount of that dividend per
          Listed Share;

          The Company shall determine the Weighted Average Price in its sole
          discretion acting in good faith and in a reasonable manner, and in
          the event that the Noteholder disputes such determination the Company
          and the Noteholder shall


                                      15
<PAGE>

          jointly appoint an independent investment bank with its headquarters
          located in London, acting as expert to determine the Weighted Average
          Price and a certificate or report of such bank shall in the absence
          of manifest, error be conclusive and binding on the Company and the
          Noteholder.

9.   EARLY REDEMPTION

     Except to the extent (if any) that this Note has been previously redeemed
     or converted or purchased and in each case cancelled as herein provided,
     the Company may at its option at any time after the Issue Date by giving
     notice in writing (substantially in the form of Schedule 3 attached
     hereto) to the Noteholder in accordance with Condition 15 (which notice
     shall specify the proposed date of redemption (which shall not be less
     than six Business Days and not more than thirty days after the date which
     it is given) and shall be irrevocable) redeem the whole, but not part
     only, of this Note on the date specified in such notice at its Redemption
     Amount. Upon the expiry of any such notice, the Company shall redeem this
     Note.

10.  PROTECTION OF THE NOTEHOLDER

     So long as this Note is outstanding, unless the Noteholder gives its (or
     their) written approval otherwise:-

     (A)  the Company will use all reasonable endeavours to (i) maintain a
          listing for all the issued Shares on the Stock Exchange or the
          Alternative Stock Exchange (as the case may be) and (ii) as soon as
          practicable after the Issue Date obtain and maintain a listing on the
          Stock Exchange or the Alternative Stock Exchange (as the case may be)
          for the Conversion Shares to be issued on the Conversion Date or the
          Maturity Date;

     (B)  the Company shall provide the Noteholder with a copy of its annual
          reports, annual financial statements and interim reports sent by the
          Company to its Shareholders within 14 Business Days after the Company
          sends the same to its Shareholders;

     (C)  in addition to the information referred to in Condition 10(B), the
          Company shall provide any Telstra Group Noteholder only and only for
          the period during which it remains the Noteholder, within ten
          Business Days upon such Telstra Group Noteholder's written request,
          but in any event no more than twice in any period of twelve months,
          with a certificate confirming that it and its Principal Subsidiaries
          are in substantial compliance with the material terms of the
          financial covenants (if any) in their significant financing
          arrangements and that the breach (if any) of such terms would not, in
          the reasonable opinion of the Company, lead to there being a default
          in the payment obligations of the Company or of its Principal
          Subsidiaries under such relevant financing arrangements;

     (D)  the Company shall ensure that all Conversion Shares issued will be
          duly and validly issued, fully paid up (or credited as fully paid up)
          and registered in the name of the Noteholder or otherwise in
          accordance with these Conditions;

     (E)  subject to Conditions 4.1(B) and 7.2, the Company shall pay all fees,
          capital and stamp duties payable in Hong Kong, if any, in respect of
          the issue of Conversion Shares upon conversion of the Redemption
          Amount of this Note;

     (F)  in the case of any consolidation, amalgamation or merger of the
          Company with any other corporation (other than a consolidation,
          amalgamation or merger in which the Company is the continuing
          corporation), or in the case of any sale or transfer of all, or
          substantially all, of the assets of the Company, the Company will
          forthwith notify the Noteholder of such event in accordance with
          Condition 15 and (so far as legally


                                      16
<PAGE>

          possible) cause the corporation resulting from such consolidation,
          amalgamation or merger or the corporation which shall have acquired
          such assets, as the case maybe, to execute a deed to ensure that the
          Noteholder shall have the right as provided for in Condition 6
          (during the period in which this Note shall be convertible) to
          convert this Note into the class and amount of shares and other
          securities and property receivable upon such consolidation,
          amalgamation, merger, sale or transfer by a holder of the number of
          Shares which would have become liable to be issued upon conversion of
          this Note immediately prior to such consolidation, amalgamation,
          merger, sale or transfer. The above provisions of this Condition
          10(F) shall apply in the same way to any subsequent consolidations,
          amalgamations, mergers, sales or transfers.

11.  EVENT OF DEFAULT

     On the occurrence of the following event of default ("Event of Default"),
     the Company shall promptly after (and in any case within seven days of)
     such event occurring give written notice to the Noteholder in accordance
     with Condition 15. Within fourteen days of receipt of such notice by the
     Noteholder or within fourteen days of the Noteholder becoming aware of the
     occurrence of the Event of Default, the Noteholder may give notice to the
     Company in accordance with Condition 15 specifying this Note is
     immediately due and repayable, whereupon it shall become immediately due
     and repayable at the Redemption Amount.

     (A)  An Event of Default shall occur where a resolution is passed or an
          order of a court of competent jurisdiction is made that the Company
          be wound up or dissolved otherwise than (i) for the purposes of or
          pursuant to and followed by a consolidation or amalgamation with or
          merger into the Company or any of its Subsidiaries or reconstruction
          or reorganisation of the Company, or (ii) for the purposes of or
          pursuant to and followed by a consolidation, amalgamation, merger,
          reconstruction or reorganisation (other than as described in (i)
          above) the terms of which shall have previously been approved in
          writing by the Noteholder, which approval shall not be unreasonably
          withheld or delayed.

12.  PRESCRIPTION

     Claims in respect of principal and interest will become void unless made
     within ten years in the case of principal and five years in the case of
     interest from the relevant date in respect thereof.

     For the purposes thereof, "relevant date" means (i) the date on which such
     payment first becomes due or (ii) if the full amount payable has not been
     received by the Noteholder on or prior to such due date, the date on which
     the full amount having been so received.

13.  VOTING

     The Noteholder shall not be entitled to any pre-emptive or other rights to
     subscribe for or purchase (whether on market terms or otherwise) any
     subsequent issues by the Company of shares, securities or other equities
     other than in accordance with these Conditions, nor shall the Noteholder
     be entitled to receive notices of attend or vote at, any meetings of the
     Company by reason only of being a Noteholder.

14.  REPLACEMENT NOTE

     If the Certificate representing this Note is lost, mutilated, defaced,
     destroyed or stolen, the relevant Noteholder shall forthwith notify the
     Company and a replacement Certificate shall be issued if the Noteholder
     provides the Company with: (i) a declaration by the Noteholder or its
     officer that the Certificate had been lost, mutilated, defaced,


                                      17
<PAGE>

     destroyed or stolen (as the case may be) or other evidence that the
     Certificate had been lost, mutilated, defaced, destroyed or stolen (as the
     case may be), (ii) the Certificate if it has been mutilated or defaced and
     (iii) an appropriate indemnity in such form and content as the Company may
     reasonably require. Any Certificate for this Note replaced in accordance
     with this Condition shall forthwith be cancelled, including, in the case
     of a Certificate replaced as being lost, stolen or destroyed, promptly
     upon the recovery of the same. All reasonable administrative costs and
     expenses associated with the preparation, issue and delivery of a
     replacement Certificate shall be borne by the relevant Noteholder.

15.  NOTICE

     Any notice (which shall in this Condition 15 include any demand and any
     other notice or communication but not, in relation to the Telstra Group
     Noteholder, any process referred to in Condition 18) required to be given
     under these Conditions shall be deemed duly served if delivered in person
     to or sent by registered or recorded delivery post or facsimile to the
     following addresses or facsimile numbers:


     (i)   Telstra Group Noteholder:

           242 Exhibition Street
           Melbourne
           Victoria
           Australia

           Fax:  (61 3) 9639 1940
           Attn: Corporate Treasurer

     (ii)  Noteholder (other than the Telstra Group Noteholder):

           as specified in the relevant Transfer Form

     (iii) the Company:

           39th Floor
           PCCW Tower
           TaiKoo Place
           979 King's Road
           Quarry Bay
           Hong Kong

           Fax:   (852) 2962 5725
           Attn:  The Company Secretary

     or such other addresses or facsimile numbers as may have been last
     notified in writing by or on behalf of the Company to the Noteholder or
     vice versa. Any such notice shall be deemed to be served at the time when
     the same is delivered in person to the address of the party to be served
     or, if served by post, on the fifth day (not being a Sunday or public
     holiday) next following the day of posting or, if served by facsimile,
     upon transmission and report confirming successful transmission.

16.  AMENDMENT

     The terms and conditions of this Note may not be varied, supplemented or
     amended except by agreement in writing between the Company and the
     Noteholder.


                                      18
<PAGE>


17.  THIRD PARTY RIGHTS

     A person who is not a party to this Note has no rights under the Contracts
     (Rights of Third Parties) Act 1999 to enforce any term or condition of
     this Note.

18.  GOVERNING LAW AND JURISDICTION

18.1 This Note shall be governed by, and construed in accordance with, the laws
     of England.

18.2 In relation to any Proceedings, the Noteholder and the Company irrevocably
     submit to the non-exclusive jurisdiction of the courts of England and
     waive any objection to Proceedings in such courts on the grounds of venue
     or on the grounds that Proceedings have been brought in an inappropriate
     forum. The taking of Proceedings in one or more jurisdictions shall not
     preclude the taking of Proceedings in any other jurisdiction (whether
     concurrently or not).

18.3 (A)  The Telstra Group Noteholder irrevocably appoint Telstra Corporation
          Limited of 44 Paul Street, London EC2A 4LB as their process agent to
          receive on their behalf service of process of any Proceedings in
          England.

     (A)  (B) The Company irrevocably appoints Simmlaw Services Limited of
          CityPoint, One Ropemaker Street, London EC2Y 9SS as its process agent
          to receive on its behalf service of process of any Proceedings in
          England.

     (B)  (C) If for any reason the relevant process agent ceases to be able to
          act as process agent or no longer has an address in England, the
          Company and the Telstra Group Noteholder irrevocably agree to appoint
          a substitute process agent with an address in England acceptable to
          the other party and to deliver to the other party(ies) a copy of the
          substitute process agent's acceptance of that appointment within
          thirty days. In the event that the Company or any Telstra Group
          Noteholder fails to appoint a substitute process agent, it shall be
          effective service for the Company or the Telstra Group Noteholder to
          serve the process upon the last known address in England of the last
          known process agent for the relevant party notified to the other
          parties notwithstanding that such process agent is no longer found at
          such address or has ceased to act provided that a copy of the
          proceedings is also sent to the relevant party's current registered
          office or principal place of business wherever situated. Nothing in
          this Note shall affect the right to serve process in any other manner
          permitted by law.


                                      19
<PAGE>


                                   SCHEDULE 1

                               CONVERSION NOTICE

Date:  [o]

The undersigned hereby confirms that the ordinary shares of HK$0.25 each of
PCCW LIMITED (the "Company") in respect of the Redemption Amount of this Note
shall be delivered in accordance with the Conditions and the terms below:


Outstanding Redemption Amount of this Note: US$________________________________

Name in which Conversion Shares are to be registered (if not the Noteholder):
_______________________________________________________________________________

Address of registered shareholder: ____________________________________________

Signature of Noteholder: ______________________________________________________

Name of Noteholder: ___________________________________________________________

Address of Noteholder: ________________________________________________________

Delivery Instructions: Name: __________________________________________________

                       Address: _______________________________________________

                       Other: _________________________________________________


For and on behalf of
[Noteholder]


___________________________
Name:
Title:


                                      20
<PAGE>


                                   SCHEDULE 2

                                 TRANSFER FORM



Date: [o]

FOR VALUE RECEIVED the undersigned hereby transfers to

_______________________________________________________________________________

_____________________________________________________________(the "Transferee")


(PLEASE PRINT OR TYPE NAME AND ADDRESS OF TRANSFEREE)

the entire of the outstanding Redemption Amount of this Note in respect of
which this Certificate is issued and all rights in respect thereof and
irrevocably requests the Company to transfer the aforesaid Redemption Amount of
the Note on the Company's books maintained in respect thereof.

By execution of this Transfer Form, the Transferee hereby agrees that, for so
long as it remains a Noteholder, it is bound by the undertakings,
acknowledgement, representations, warranties and confirmations expressed in the
Conditions as being given by a Noteholder and, if the Transferee is a member of
the Telstra Group at the date hereof, by a Telstra Group Noteholder.

The Transferee's contract details for the purpose of Condition 15 are:

[Address]

[Fax]

[Attn]

All payments in respect of the Redemption Amount of this Note transferred are
to be made (unless otherwise instructed by the Transferee) to the following
account:

Name of bank:


US$ account number:


For the account of :-


Dated: ________________________


Name: _________________________


                                      21
<PAGE>


For and on behalf of
[Transferor]


_______________________________
Name:
Title:



Confirmed by :-

For and on behalf of
[Transferee]


_______________________________
Name:
Title:


Date: _________________________


This Transfer Form shall have no effect if the result of such purported
transfer is that at any time the Note shall be or may be considered by the
Company of being capable of becoming quoted, listed, dealt in or traded on any
stock exchange, over-the-counter market or other centrally organised or
regulated securities market.

[5 Consent to transfer by:-



_______________________________
For and on behalf of
PCCW LIMITED]


Notes:

1.   A representative of the Noteholder should state the capacity in which he
     signs (e.g. director).

2.   The signature of the person effecting a transfer shall conform to the list
     of duly authorised specimen signatories supplied by the registered holder
     or be certified by a recognised bank, notary public or in such other
     manner as the Company may require.

3.   In the case of joint holders, all joint holders must sign this transfer
     form.

4.   The name of the transferor in this transfer notice must correspond to the
     name as it appears on the face of the attached Certificate.

5.   To be included in all Transfer Forms other than between Telstra Group
     Noteholders.


                                      22
<PAGE>


                                   SCHEDULE 3

                           COMPANY REDEMPTION NOTICE



[Noteholder(s)]

[Address]

Attention: [o]



                                                                         [Date]


Dear Sirs

We, PCCW LIMITED (the "Company"), refer to Condition 8 of the US$54,377,474.94
5% Mandatory Convertible Note due 2005 (the "Note") and hereby elect to redeem
the entire outstanding Redemption Amount (as defined in the Conditions of the
Note) of the Note on [         ]1 in accordance with Condition 8 of the Note.

For and on behalf of
PCCW Limited


_______________________________
Name:
Title:



1.   To be at least 6 Business Days and not more than 30 days after the date on
     which this notice is given.


                                      23
<PAGE>


                                   SCHEDULE 4

                            CONVERSION EVENT NOTICE


                                  PCCW LIMITED


            US$54,377,474.94 5% MANDATORY CONVERTIBLE NOTE DUE 2005
                                  (the "Note")

Date [o]

The undersigned gives notice to PCCW LIMITED (the "Company") pursuant to
Condition 6.1 of the terms and conditions of the Note that a Conversion Event
as defined in Condition 6.2 has occurred details of which are set out below.

[Conversion Event Details].




_______________________________
For and on behalf of
[Noteholder]



                                      24