<PAGE>

                                                                   EXHIBIT 10.48

                                                                  Execution Copy

                               Dated 27 July 2004

                 CHINA NETCOM CORPORATION INTERNATIONAL LIMITED
                                 (as Mortgagor)

                                  in favour of

             INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED
                              (as Security Trustee)

                  ---------------------------------------------

                           DEED OF MORTGAGE OF SHARES
                       in Asia Netcom Corporation Limited

                  ---------------------------------------------

                                 RICHARDS BUTLER
                                    HONG KONG

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                                                            [Mortgage of Shares]

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
CLAUSE NO.                                      CLAUSE HEADING                                                       PAGE NO.
----------                                      --------------                                                       --------
<S>         <C>                                                                                                      <C>
1.          DEFINITIONS AND CONSTRUCTION..........................................................................      1

2.          COVENANT TO PAY.......................................................................................      3

3.          MORTGAGE AND ASSIGNMENT...............................................................................      3

4.          CONTINUING AND INDEPENDENT SECURITY...................................................................      6

5.          REPRESENTATIONS AND WARRANTIES........................................................................      8

6.          TAXES AND OTHER DEDUCTIONS............................................................................     11

7.          COSTS, CHARGES AND EXPENSES...........................................................................     12

8.          UNDERTAKINGS..........................................................................................     13

9.          ENFORCEMENT...........................................................................................     14

10.         DIVIDENDS AND VOTING RIGHTS...........................................................................     16

11.         APPLICATION OF PROCEEDS...............................................................................     17

12.         INDEMNITY.............................................................................................     17

13.         SUSPENSE ACCOUNT......................................................................................     18

14.         SET-OFF...............................................................................................     18

15.         POWER OF ATTORNEY.....................................................................................     19

16.         FURTHER ASSURANCE.....................................................................................     19

17.         NOTICES...............................................................................................     20

18.         WAIVERS, AMENDMENTS AND CONSENTS, REMEDIES, SEVERABILITY, ASSIGNMENT AND COUNTERPARTS.................     21

19.         GOVERNING LAW AND JURISDICTION........................................................................     22

SCHEDULE 1 - PARTICULARS OF THE SHARES............................................................................     24

SCHEDULE 2 - FORM OF INSTRUMENT OF TRANSFER.......................................................................     25

SCHEDULE 3 - FORM OF LETTER OF RESIGNATION........................................................................     26

SCHEDULE 4 - FORM OF WRITTEN RESOLUTION...........................................................................     27

SCHEDULE 5 - FORM OF AUTHORISATION FROM DIRECTORS/SECRETARY.......................................................     28

SCHEDULE 6 - FORM OF LETTER OF UNDERTAKING........................................................................     29

SCHEDULE 7 - FORM OF ACKNOWLEDGEMENT OF NOMINEE...................................................................     30

EXECUTION PAGE ...................................................................................................     31
</TABLE>

                                     - i -

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                                                            [Mortgage of Shares]

THIS DEED OF MORTGAGE OF SHARES is made on 27 July 2004

BETWEEN:-

(1)   CHINA NETCOM CORPORATION INTERNATIONAL LIMITED, a company incorporated
      under the laws of Bermuda, and whose registered office is situate at
      Clarendon House, 2 Church Street, Hamilton HM11, Bermuda (the
      "MORTGAGOR"); and

(2)   INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED, a company
      incorporated under the laws of Hong Kong through its head office at ICBC
      Asia Building, 122-126 Queen's Road Central, Hong Kong acting on its own
      behalf and as facility agent and trustee for and on behalf of the Finance
      Parties (the "SECURITY TRUSTEE").

WHEREAS:-

(A)   By a facility agreement signed on 2 December, 2003 (but held undated in
      escrow), as released from escrow and amended and restated by the
      Supplemental Amendment and Restatement Deed (the "FACILITY AGREEMENT")
      entered into by (1) Asia Netcom Corporation Limited, as borrower (the
      "BORROWER"); (2) the banks and financial institutions named therein as
      lenders (the "LENDERS"); (3) Industrial Commercial Bank of China (Asia)
      Limited as arranger; and (4) the Security Trustee as facility agent, the
      Lenders have agreed, upon and subject to the terms of the Facility
      Agreement, to make available to the Borrower a term loan facility of up to
      US$150,000,000 (the "FACILITY") for the purposes more particularly
      specified therein.

(B)   The Security Trustee is acting as facility agent for the Finance Parties
      pursuant to the Facility Agreement and as security trustee for the Finance
      Parties pursuant to this Deed and the other Finance Documents.

(C)   It is a condition precedent to the availability of the Facility that the
      Mortgagor shall have executed and delivered this Deed to the Security
      Trustee.

NOW THIS DEED WITNESSES as follows:-

1.    DEFINITIONS AND CONSTRUCTION

1.1   TERMS DEFINED

      In this Deed, unless the context otherwise requires, terms used or defined
      in the Facility Agreement shall have the same meaning or construction
      and:-

      "COLLATERAL" means the assets of the Mortgagor from time to time subject,
      or expressed to be subject to the Security Interest constituted or
      expressed to be constituted by this Deed or any part of those assets and
      includes:-

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                                                            [Mortgage of Shares]

      (i)   the Shares;

      (ii)  all stocks, shares or other securities, rights, monies or other
            assets (the "RELATED ASSETS") accruing, offered or issued at any
            time by way of bonus, redemption, exchange, purchase, substitution,
            conversion, preference, option or otherwise in respect of the Shares
            or the above mentioned Related Assets;

      (iii) all Dividends;

      (iv)  allotments, offers and rights accruing or offered in respect of any
            Shares or the above mentioned Related Assets; and

      (v)   other rights and assets attaching to or deriving from or exercisable
            by virtue of any right title or interest in or to any Shares or the
            above mentioned Related Assets.

      "DELEGATE" means a delegate or sub-delegate appointed under Clause 15.2.

      "DIVIDENDS" means all dividends, interest and other sums received or
      receivable by any person in its capacity as shareholder of the Borrower
      and includes:

      (i)   the right to receive any and all such sums and all claims in respect
            of any default in paying such sums; and

      (ii)  all forms of remittance of such sums.

      "NOMINEE" means in respect of any Share held by a person as nominee or on
      trust for the Mortgagor and who is described as "REGISTERED SHAREHOLDER IN
      SCHEDULE 1".

      "RECEIVER" means any receiver, manager, receiver and manager or other
      similar officer appointed by the Security Trustee in respect of the
      security hereby granted.

      "SECURED OBLIGATIONS" means any and all moneys, liabilities and
      obligations (whether actual or contingent, whether now existing or
      hereafter arising, whether or not for the payment of money, and including,
      without limitation, any obligation or liability to pay damages) which are
      or may become due owing, or incurred by the Borrower or any other Security
      Party which is a member of the CNC HK Group to any Finance Party under or
      in connection with any Finance Document and/or all other obligations
      hereby secured.

      "SECURITY PERIOD" means the period from the date of this Deed up to the
      date upon which all the Secured Obligations have been performed and
      discharged in full to the satisfaction of the Security Trustee.

      "SHARES" means in respect of the Mortgagor:

      (a)   all present and future shares in the Borrower, including the shares
            issued and outstanding at the date of this Deed as described in
            Schedule 1 (including any shares held by Nominee for and on behalf
            of the Mortgagor);

      (b)   all warrants, options or other rights to subscribe for, purchase or
            otherwise acquire those shares; and

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                                                            [Mortgage of Shares]

      (c)   all rights relating to any of those shares which are deposited with,
            or registered in the name of, any depositary, custodian, nominee or
            other similar person (including rights against any such person).

1.2   TRUST

      All rights, benefits, interests, powers and discretions granted to or
      conferred on the Security Trustee pursuant to this Deed shall be held by
      the Security Trustee on trust for the benefit of itself as Security
      Trustee and each other Finance Party from time to time. The Security
      Trustee may do all acts within its powers to administer and manage the
      trust constituted by this Clause including any full or partial release by
      deed of the rights, benefits and interests conferred by Clause 3.1
      (Mortgage) or the release of all or any part of the Collateral from this
      Deed. The trust constituted by this Clause shall come into existence on
      the date of this Deed and shall last for so long as any of the Secured
      Obligations remain outstanding provided that for the purposes of the rule
      against perpetuities, the perpetuity period applicable to the trust and
      any dispositions made or to be made pursuant to this Deed and this trust,
      is hereby specified as a period of eighty (80) years less one (1) day from
      the date of this Deed.

1.3   CLAUSE HEADINGS

      Clause headings and the table of contents are for ease of reference only
      and shall be ignored in the interpretation of this Deed.

1.4   CONSTRUCTION

      In this Deed, unless the context otherwise requires:-

      (a)   Clause 1.3 of the Facility Agreement shall be deemed incorporated in
            this Deed mutatis mutandis as if set out separately in this Deed;
            and

      (b)   references to the "MORTGAGOR", the "BORROWER", the "SECURITY
            TRUSTEE", any "FINANCE PARTY" or any "LENDER" include, where the
            context permits, their respective successors and permitted
            transferees and permitted assigns in accordance with their
            respective interests.

2.    COVENANT TO PAY

      The Mortgagor hereby covenants that it will on demand pay to the Security
      Trustee and the other Finance Parties, the Secured Obligations when the
      same become due for payment or discharge in accordance with the Finance
      Documents.

3.    MORTGAGE AND ASSIGNMENT

3.1   MORTGAGE

      In consideration of the Lenders agreeing to make the Facility available to
      the Borrower upon the terms and conditions of the Facility Agreement and
      as a continuing security for

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                                                            [Mortgage of Shares]

      the due and punctual performance and discharge of the Secured Obligations,
      the Mortgagor as sole legal and beneficial owner of the Shares not held by
      a Nominee and as beneficial owner of the Shares held by a Nominee hereby:

      (a)   mortgages and charges by way of first fixed charge to the Security
            Trustee (as trustee for the Finance Parties) all its rights, title
            and interest, present and future, in and to, the Collateral; and

      (b)   assigns, and agrees to assign absolutely to the Security Trustee (as
            trustee for the Finance Parties) all its rights (including those
            rights it may have against a Nominee), present and future, relating
            to any of the Shares, including:

            (i)   its rights relating to or against any depositary, nominee or
                  similar person with whom any of the Shares may be deposited to
                  the extent of those Shares;

            (ii)  rights that it may have against any person to require delivery
                  to it of any of the Shares;

            (iii) rights (contractually or otherwise) to give instructions
                  relating to the Shares; and

            (iv)  all claims for damages and rights to receive moneys due or to
                  become due for any reason whatsoever in respect of any of the
                  Shares,

            including those rights it may have against a Nominee or Delegate.

3.2   DELIVERY OF DOCUMENTS

      The Mortgagor shall forthwith upon execution of this Deed deliver or
      procure to be delivered (as the case may be) to the Security Trustee each
      of the following documents:-

      (i)   all original share certificates or such other documents evidencing
            title in respect of the Shares;

      (ii)  instruments of transfer in the form of Schedule 2 duly executed by
            the Mortgagor and/or its Nominee (as the case may be) in respect of
            the Shares with the name(s) of the transferee(s), date and
            consideration left blank;

      (iii) undated letters of resignation in the form of Schedule 3 duly
            executed by each of the directors and the secretary of the Borrower
            as at the date of this Deed;

      (iv)  signed but undated resolutions of the directors of the Borrower
            approving the resignation of the directors and the secretary
            referred to in sub-paragraph (iii) above in the form set out in
            Schedule 4;

      (v)   letter of authority to date the letters of resignation and board
            resolutions respectively referred to in sub-paragraphs (iii) and
            (iv) above in the form set out in Schedule 5 signed by all the
            directors and the secretary of the Borrower;

      (vi)  letter of undertaking not to appoint any additional or substitute
            directors in the

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                                                            [Mortgage of Shares]

            form set out in Schedule 6 signed by all the directors of the
            Borrower; and

      (vii) letter of acknowledgement in the form set out in Schedule 7 from the
            Nominees acknowledging the Security Interests constituted by this
            Deed and agreeing to act in accordance with the instructions of the
            Security Trustee.

3.3   PERFORMANCE AND INDEMNITY

      Notwithstanding the foregoing, the Mortgagor shall remain liable to
      perform all the obligations to be performed by it in respect of the
      Collateral and shall discharge fully its obligations thereunder as they
      become due and neither the Security Trustee nor any other Finance Party
      shall have any obligation of any kind whatsoever thereunder or be under
      any liabilities whatsoever in the event of any failure to perform its
      obligations thereunder and the Mortgagor hereby indemnifies and agrees to
      keep indemnified the Security Trustee and the other Finance Parties and
      each of them from and against any such liability.

3.4   RELEASE AND TRANSFER

      (a)   The Security Trustee shall, upon the full performance and discharge
            of the Secured Obligations to the satisfaction of the Security
            Trustee and the Finance Parties, at the request and cost of the
            Mortgagor and in such form and with such conditions as the Security
            Trustee shall reasonably require, release and transfer and reassign
            (as appropriate) to the Mortgagor the Collateral.

      (b)   Notwithstanding any discharge, release or settlement from time to
            time between the Security Trustee and the Mortgagor, if any
            security, disposition or payment granted or made to the Security
            Trustee in respect of the Secured Obligations by the Mortgagor or
            any other person is avoided or set aside or ordered to be
            surrendered, paid away, refunded or reduced by virtue of any
            provision, law or enactment relating to bankruptcy, insolvency,
            liquidation, winding-up, composition or arrangement for the time
            being in force or for any other reason, the Security Trustee shall
            be entitled thereafter to enforce this Deed as if no such discharge,
            release or settlement had occurred.

      (c)   For that Collateral which has been transferred and registered under
            the name of the Security Trustee (as trustee for the Finance
            Parties) or its Nominee, the Security Trustee shall only be obliged
            to return the share certificate(s) then representing the Collateral
            not yet disposed of or realised by the Security Trustee pursuant to
            its powers under this Deed (but not the original share certificates
            originally delivered to the Security Trustee by the Mortgagor) with
            the instruments of transfer duly executed in favour of the Mortgagor
            or such other person as the Mortgagor may direct.

3.5   CALLS

      The Mortgagor shall during the continuance of this security pay all calls
      or other payments which may become due in respect of any part of the
      Collateral and the Security Trustee may, if it thinks fit, make such
      payments on behalf of the Mortgagor. Any sums so paid by the Security
      Trustee shall be repayable by the Mortgagor to the Security Trustee on
      demand together with interest at the Default Rate from the date of

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                                                            [Mortgage of Shares]

      such payment by the Security Trustee and pending such repayment shall
      constitute part of the Secured Obligations.

3.6   REGISTRATION OF TITLE TO THE SHARES

      The Mortgagor hereby agrees and authorises the Security Trustee to arrange
      for the Shares and any other Collateral to be registered at any time
      following the security constituted by this Deed becoming enforceable in
      the name of the Security Trustee or its nominee and (under the powers of
      enforcement contained herein) to transfer or cause the Collateral to be
      transferred to and registered in the name of any purchasers or transferees
      from the Security Trustee or its nominee and the Mortgagor undertakes from
      time to time to execute and sign all transfers, powers of attorney and
      other documents which the Security Trustee may require for perfecting its
      title to or, otherwise registering and transferring any part of the
      Collateral or for vesting the same in itself or its nominee or in any
      purchasers or transferees.

4.    CONTINUING AND INDEPENDENT SECURITY

4.1   CONTINUING SECURITY

      This Deed shall remain in full force and effect by way of a continuing
      security notwithstanding the insolvency or liquidation or any incapacity
      or change in the constitution or status of the Mortgagor, the Borrower or
      any other person and in particular but without limitation shall not be,
      nor be considered as, satisfied by any intermediate discharge or payment
      on account of any liabilities or any settlement of accounts between the
      Mortgagor and the Security Trustee or any other person.

4.2   ADDITIONAL SECURITY

      This Deed and the security hereby created shall be in addition to and not
      in substitution for or derogation of any other Security Interest,
      guarantee or other security (whether given by the Mortgagor or otherwise)
      now or from time to time hereafter held by the Security Trustee or any
      Finance Party in respect of or in connection with the Secured Obligations.

4.3   UNRESTRICTED ENFORCEMENT

      The Security Trustee need not before exercising any of the rights, powers
      or remedies conferred upon it by this Deed or by law (i) take action or
      obtain judgment in any court against the Borrower or the Mortgagor or any
      other person, (ii) make or file any claim or prove in a winding-up or
      liquidation of the Borrower or the Mortgagor or of any other person or
      (iii) enforce or seek to enforce the recovery of the monies and
      liabilities hereby secured by any other security or other rights all of
      which the Mortgagor hereby waives and may be enforced for any balance due
      after resorting to any one or more other means of obtaining payment or
      discharge of the monies, obligations and liabilities hereby secured.

4.4   NO DISCHARGE

      The liabilities and obligations of the Mortgagor under this Deed and the
      security

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                                                            [Mortgage of Shares]

      constituted by this Deed shall remain in force notwithstanding any act,
      omission, event or circumstance whatsoever until the expiry of the
      Security Period and without limiting the foregoing, neither the
      liabilities of the Mortgagor under this Deed nor the validity or
      enforceability of this Deed shall be prejudiced, affected or discharged
      by:-

      (a)   the granting of any time or indulgence to the Borrower or the
            Mortgagor or any other Security Party or any other person in respect
            of the Secured Obligations;

      (b)   any variation or modification of the Facility Agreement, any of the
            other Finance Documents or any other documents referred to therein
            or related thereto;

      (c)   the invalidity or unenforceability of any obligation or liability of
            any party under the Facility Agreement, any of the other Finance
            Documents or any other documents referred to therein or related
            thereto;

      (d)   any invalidity or irregularity in the execution of the Facility
            Agreement, any of the other Finance Documents or any other documents
            referred to therein or relating thereto;

      (e)   any lack of capacity or deficiency in the powers of the Borrower or
            the Mortgagor or any other Security Party or any other person to
            enter into or perform any of its obligations under the Facility
            Agreement or any of the other Finance Documents to which it is party
            or any other documents referred to therein or related thereto or any
            irregularity in the exercise thereof or any lack of authority by any
            person purporting to act on behalf of the Borrower or the Mortgagor
            or such Security Party or such other person;

      (f)   the insolvency, bankruptcy or liquidation or any incapacity,
            disability, death or limitation or any change in the constitution or
            status of the Borrower or the Mortgagor or any other Security Party
            or any other person;

      (g)   any other Finance Document, Security Interest, guarantee or other
            security or right or remedy being or becoming held by or available
            to the Security Trustee and/or the Lenders or by any other person or
            by any of the same being or becoming wholly or partly void, voidable
            or unenforceable or impaired or by the Security Trustee and/or the
            Lenders at any time releasing, refraining from enforcing, varying or
            in any other way dealing with any of the same or any power, right or
            remedy the Security Trustee and/or the Lenders may now or hereafter
            have from or against the Borrower or the Mortgagor or any other
            Security Party or any other person;

      (h)   any waiver, exercise, omission to exercise, compromise, renewal or
            release of any rights against the Borrower or the Mortgagor or any
            other Security Party or any other person or any compromise,
            arrangement or settlement with any of the same;

      (i)   any act, omission, event or circumstance which would or may but for
            this provision operate to prejudice, affect or discharge this Deed
            or the liability of the Mortgagor hereunder.

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                                                            [Mortgage of Shares]

4.5   NO SUBROGATION

      (a)   The Mortgagor shall not exercise any right of subrogation,
            contribution or any other rights of a surety or enforce any security
            or other right or claim against the Borrower (whether in respect of
            its liability under this Deed or otherwise) or any other person who
            has guaranteed or given any security in respect of the Secured
            Obligations or claim in the insolvency or liquidation of the
            Borrower or any such other person in competition with the Security
            Trustee or the Lenders.

      (b)   If the Mortgagor receives any payment or benefit in breach of this
            Clause, it shall hold the same upon trust for the Security Trustee
            as a continuing security for the Secured Obligations.

5.    REPRESENTATIONS AND WARRANTIES

5.1   REPRESENTATIONS AND WARRANTIES

      The Mortgagor represents and warrants to the Security Trustee and each of
      the other Finance Parties that:-

      (a)   STATUS: the Mortgagor is a company duly incorporated, validly
            existing and in good standing under the laws of Bermuda and has full
            power, authority and legal right to own its property and assets and
            to carry on its business as such business is now being conducted;

      (b)   POWER AND AUTHORITY: the Mortgagor has all legal power, authority
            and capacity to enter into this Deed and perform its obligations
            under this Deed and all actions (including any corporate actions)
            required to authorise the execution and delivery of this Deed and
            the performance of its obligations under this Deed have been duly
            taken;

      (c)   LEGAL VALIDITY: this Deed constitutes or, when so executed and
            delivered, will constitute legal, valid and binding obligations of
            the Mortgagor enforceable in accordance with its terms;

      (d)   NON-CONFLICT WITH LAWS: the entry into and performance of this Deed
            and the transactions contemplated by this Deed do not and will not
            conflict with or result in (i) a breach of any law, judgment or
            regulation or any official or judicial order, or (ii) a breach of
            the constitutional documents of the Mortgagor, or (iii) a material
            breach of any agreement or document to which the Mortgagor is a
            party or which is binding upon it or any of its assets or revenues
            with a monetary value greater than US$500,000, nor cause any
            limitation placed on it or the powers of its directors to be
            exceeded or result in the creation or imposition of any Security
            Interest on any of its assets or revenues pursuant to the provisions
            of any such agreement or document;

      (e)   NO CONSENT: other than the Consents, no consent of, giving of notice
            to, or registration with, or taking of any other action in respect
            of, any governmental authority or agency in any relevant
            jurisdiction (including Bermuda) or of any creditors of the
            Mortgagor is required for or in connection with the execution,

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                                                            [Mortgage of Shares]

            performance, validity, enforceability and admissibility in evidence
            in the proceedings of this Deed, or the carrying out by the
            Mortgagor of its obligations under this Deed;

      (f)   NO REGISTRATION: it is not necessary in order to ensure the
            legality, validity, enforceability or admissibility in evidence of
            this Deed that it or any other instrument be notarised, filed,
            recorded, registered or enrolled in any court or other authority or
            that any stamp, registration or similar tax or charge be paid on or
            in relation to this Deed and this Deed is in proper form for its
            enforcement in the courts of Hong Kong, Bermuda and all
            jurisdictions the subject of any legal opinion referred to in
            paragraph 4 of Schedule 3 of the Facility Agreement;

      (g)   LITIGATION: except as disclosed in a letter of even date from the
            Borrower to the Security Trustee, no litigation, arbitration or
            administrative proceeding is currently taking place or pending or,
            to the knowledge of the officers of the Mortgagor, threatened
            against the Mortgagor or any of its assets which could in the
            reasonable opinion of the Security Trustee materially and adversely
            affect its business, assets or financial condition or its ability to
            perform its obligations under this Deed;

      (h)   NO WINDING-UP: it has not taken any corporate action nor has any
            other step has been taken or legal proceedings have been commenced
            or threatened against it for its winding-up, dissolution,
            administration or reorganisation or for the appointment of a
            receiver, administrator, trustee or similar officer of it or all or
            any of its assets or revenues, except as permitted by Clause 17.1(g)
            of the Facility Agreement;

      (i)   TAXES ON PAYMENTS: all payments to be made by the Mortgagor under
            this Deed may be made by the Mortgagor free and clear of, and
            without deduction for, Taxes and no deductions or withholdings are
            required to be made therefrom save as specified in any legal opinion
            referred to in paragraphs 2, 3 and 4 of Schedule 3 to the Facility
            Agreement; and no Taxes are imposed on by virtue of the execution or
            delivery by the Mortgagor of this Deed or any document to be
            executed or delivered under this Deed;

      (j)   TAX LIABILITIES: the Mortgagor has complied with all Taxation laws
            in all material respects in all jurisdictions in which it is subject
            to Taxation and has paid all Taxes due and payable by it and no
            material claims are being asserted against it with respect to Taxes;

      (k)   NO DEFAULT:

            (a)   no Default has occurred and is continuing;

            (b)   it is not nor, with the giving of notice or lapse of time or
                  satisfaction of any other condition or any combination
                  therefore, would it be in material breach of or in default
                  under any agreement relating to Financial Indebtedness of
                  which it is a party or by which it may be bound;

      (l)   NO IMMUNITY: the Mortgagor is generally subject to civil and
            commercial law

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                                                            [Mortgage of Shares]

            and to legal proceedings and neither the Mortgagor nor any of its
            assets or revenues is entitled to any immunity or privilege
            (sovereign or otherwise) from any set-off, judgment, execution,
            attachment or other legal process;

      (m)   COMPLIANCE, WITH CONSENTS AND LICENSES: every consent,
            authorisation, licence or approval required for the time being by
            the Mortgagor in connection with the conduct of its business and the
            ownership, use, exploitation or occupation of its property and
            assets has been applied for and not refused or has been obtained and
            is in full force and effect and there has been no material default
            in the observance of the conditions and restrictions (if any)
            imposed on, or in connection with, any of the same which may have a
            material adverse effect on its ability to perform its obligations
            under this Deed and, to the knowledge of the officers of the
            Mortgagor, no circumstances have arisen whereby any remedial action
            is likely to be required to be taken by, or at the expense of the
            Mortgagor under or pursuant to any law or regulation applicable to
            the business, property or assets of the Mortgagor;

      (n)   NO FINANCIAL INDEBTEDNESS: it does not have any Financial
            Indebtedness other than as permitted by Clause 16.17 of the Facility
            Agreement;

      (o)   ISSUED AND PAID-UP SHARES: the Shares represent all of the shares in
            the Borrower and all the Shares have been validly issued and are
            fully paid up;

      (p)   SOLE AND BENEFICIAL OWNER: other than the Shares held by any
            Nominee, the Mortgagor is the sole, absolute, legal and beneficial
            owner of the Collateral and its has good and marketable title
            thereto;

      (q)   SECURITY INTEREST: no Security Interest exists over all or any of
            its right, title, interest or benefit in the Collateral (other than
            as created by this Deed); and

      (r)   THIRD PARTY RIGHT: it has not sold or otherwise disposed of any of
            the Collateral or granted in favour of any other person any interest
            in or any option or other rights in respect of any of the
            Collateral.

      (s)   COMPANY: the Company is validly incorporated and registered as an
            exempted company in and under the laws of Bermuda and, if so
            required by the Security Trustee, and at the expense of the
            Mortgagor, the Mortgagor shall at any time apply to the Registrar of
            Companies in Bermuda for the official form of Certificate of
            Compliance relating to the continued corporate existence of the
            Borrower and shall, if the same is issued, deliver the same to the
            Security Trustee.

5.2   CONTINUING REPRESENTATION AND WARRANTY

      The Mortgagor also represents and warrants to and undertakes with the
      Security Trustee that the foregoing representations and warranties in
      Clause 5.1(a) to (n) inclusive are deemed to be made by the Mortgagor on
      each Drawdown Date and on each Interest Payment Date with reference to the
      facts and circumstances then existing and that the foregoing
      representations in Clause 5.1(o) and (s) will be true and accurate
      throughout the continuance of this Deed with reference to the facts and
      circumstances from time to time.

                                      -10-

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                                                            [Mortgage of Shares]

6.    TAXES AND OTHER DEDUCTIONS

6.1   TAX GROSS-UP

      (a)   All sums payable by the Mortgagor under this Deed shall be paid in
            full without any restriction or condition and free and clear of any
            Tax or other deductions or withholdings of any nature.

      (b)   If at any time the Mortgagor or any other person is required in any
            jurisdiction to make any deduction or withholding in respect of
            Taxes or otherwise from any payment due under this Deed for the
            account of the Security Trustee or any other Finance Party (or if
            the Security Trustee is required to make any such deduction or
            withholding from a payment to any other Finance Party), the sum due
            from the Mortgagor in respect of such payment shall be increased to
            the extent necessary to ensure that, after the making of such
            deduction or withholding, the Security Trustee and each other
            Finance Party receives on the due date for such payment (and
            retains, free from any liability in respect of such deduction or
            withholding) a net sum equal to the sum which it would have received
            had no such deduction or withholding been required to be made.

      (c)   The Mortgagor's obligations under Clause 6.1(a) and (b) shall not
            apply in respect of any Tax on Overall Net Income levied on a
            Finance Party.

      (d)   All Taxes required by law to be deducted or withheld by the
            Mortgagor from any amounts paid or payable under this Deed shall be
            paid by the Mortgagor when due (except for such amounts being
            disputed by the Mortgagor in good faith) to the relevant taxing
            authority.

6.2   TAX INDEMNITY

      The Mortgagor shall indemnify the Security Trustee and each other Finance
      Party against any losses or costs incurred by any of them by reason of:

      (a)   any failure of the Mortgagor or any other person to make any such
            deduction or withholding referred to in Clause 6.1; or

      (b)   any increased payment referred to in Clause 6.1 not being made on
            the due date for such payment; or

      (c)   any Taxes which are being disputed by the Mortgagor and remaining
            unpaid; and

      (d)   any liability suffered (directly or indirectly) for or on account of
            Tax by that Finance Party in respect of any payment received or
            receivable or deemed to be received or receivable under this Deed.

6.3   EVIDENCE OF PROOF

      The Mortgagor shall promptly deliver to the Security Trustee any receipts,
      certificates

                                      -11-

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                                                            [Mortgage of Shares]

      or other proof evidencing the amounts (if any) paid or payable in respect
      of any deduction or withholding as aforesaid.

6.4   TAX CREDIT

      If the Mortgagor makes a Tax Payment and the Security Trustee determines
      that:-

      (a)   a Tax Credit is attributable either to an increased payment of which
            that Tax Payment forms part, or to that Tax Payment; and

      (b)   it has obtained, utilised and retained that Tax Credit,

      the Security Trustee shall, promptly after obtaining the benefit of that
      Tax Credit, pay an amount to the Mortgagor which will leave it (after that
      payment) in the same after-Tax position as it would have been in had the
      Tax Payment not been required to be made by the Mortgagor. Any certificate
      or determination of the Security Trustee showing in reasonable details the
      calculations made by the Security Trustee as to any amount for the
      purposes of this Clause 6 shall, in the absence of manifest error, be
      conclusive and binding on the Mortgagor.

7.    COSTS, CHARGES AND EXPENSES

7.1   EXPENSES

      The Mortgagor shall pay to the Security Trustee on demand and in the
      currency specified by the Security Trustee:-

      (a)   irrespective as to whether any Advance is made, all expenses
            (including legal, printing and out-of-pocket expenses) reasonably
            incurred by the Security Trustee or any other Finance Party in
            connection with the negotiation, preparation and execution of this
            Deed and any amendment or extension of or the granting of any waiver
            or consent under this Deed; and

      (b)   all expenses on a full indemnity basis (including legal and
            out-of-pocket expenses) properly incurred by the Security Trustee or
            any other Finance Party in connection with the enforcement of or
            preservation of any rights under this Deed, or otherwise in respect
            of the monies owing under this Deed together with interest at the
            Default Rate from the date on which such expenses were incurred to
            the date of payment (both before and after judgment).

7.2   STAMP DUTY

      The Mortgagor shall pay all stamp, documentary, registration or other like
      duties or taxes (including any duties or taxes payable by the Security
      Trustee or any Finance Party) imposed on or in connection with this Deed
      and shall indemnify each of the Security Trustee and the other Finance
      Parties against any liability arising by reason of any delay or omission
      by the Mortgagor to pay such duties or taxes.

                                      -12-

<PAGE>

                                                            [Mortgage of Shares]

8.    UNDERTAKINGS

      The Mortgagor hereby undertakes and agrees with the Security Trustee, for
      the benefit of the Finance Parties, throughout the continuance of this
      Deed and so long as the Secured Obligations or any part thereof remains
      owing that, unless the Security Trustee otherwise agrees in writing, it
      will:-

      (a)   not create or attempt or agree to create or permit to exist any
            Security Interest over all or any part of the Collateral or any
            interest therein or otherwise sell, transfer, assign, deal with or
            dispose of all or any part of the Collateral or attempt or agree to
            do any of the same (except under or pursuant to this Deed);

      (b)   not grant or attempt or agree to grant in favour of any other person
            any interest in or any option or other rights in respect of any of
            the Collateral;

      (c)   ensure that no person holding any of the Collateral as its Nominee
            for the time being does any of the acts prohibited in this Deed;

      (d)   subject to Clause 7.6(b) of the CNC HK Guarantee at all times remain
            the sole, direct, absolute, legal and beneficial owner of the
            Collateral;

      (e)   subject to Clause 7.6(b) of the CNC HK Guarantee procure that no
            material amendment or supplement is made to the constitutional
            documents of the Borrower other than pursuant to Clause 16.15 of the
            Facility Agreement without the prior written consent of the Security
            Trustee;

      (f)   immediately upon the appointment of any new director of the
            Borrower, deposit or procure that there be deposited with the
            Security Trustee, the equivalent documents mutatis mutandis with
            respect to such director in the forms set out in Schedules 3, 4, 5
            and 6;

      (g)   not take or permit any action whereby the rights attaching to the
            Collateral and/or any other shares in the Borrower are altered;

      (h)   give to the Security Trustee upon receipt copies of all notices,
            requests and other documents sent or received with respect to the
            Collateral;

      (i)   give to the Security Trustee such information regarding the
            Collateral as the Security Trustee shall reasonably require;

      (j)   do or permit to be done every act or thing which the Security
            Trustee may from time to time require for the purpose of enforcing
            the rights of the Security Trustee hereunder and will allow its name
            to be used as and when required for that purpose;

      (k)   not do or cause or permit to be done anything which may in any way
            depreciate, jeopardise or otherwise prejudice the value of the
            security constituted hereunder;

      (l)   procure that the Borrower will forthwith on presentation by the
            Security Trustee or its nominee following the security constituted
            by this Deed becoming enforceable, duly register all transfers of
            the Collateral; and

                                      -13-

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                                                            [Mortgage of Shares]

      (m)   if the Mortgagor shall acquire any such other stocks or shares as
            referred to in the definition of Collateral, it shall forthwith
            deliver or procure that there be delivered to the Security Trustee
            the certificates in respect thereof together with instruments of
            transfer in respect thereof duly executed in blank to enable the
            same to be registered in the name of the Security Trustee or its
            nominee following the security constituted by this Deed becoming
            enforceable.

9.    ENFORCEMENT

9.1   EVENTS OF DEFAULT

      The security created by this Deed shall become enforceable immediately
      upon the occurrence of an Event of Default which is continuing. For the
      purposes of this Clause, each of the following events and circumstances
      shall be an Event of Default:-

      (a)   any Event of Default as that term is defined in the Facility
            Agreement;

      (b)   if the Mortgagor purports or attempts to create any Security
            Interest (except under or as permitted by this Deed) over all or any
            part of the Collateral or any third party asserts a claim in respect
            thereof, and

      the Security Trustee shall be entitled, without prior or further notice
      and whether or not it shall have appointed a Receiver, to exercise the
      power to sell or otherwise dispose of the whole or any part of the
      Collateral.

9.2   EXCLUSION OF LIMITATION

      No restrictions imposed by any ordinance or other statutory provision in
      relation to the exercise of any power of sale or consolidation shall apply
      to this Deed.

9.3   APPOINTMENT AND POWERS OF RECEIVER

      (a)   At any time after the security hereby created has become
            enforceable, or if requested by the Mortgagor, the Security Trustee
            may in writing either under seal or under the hand of a duly
            authorised officer of the Security Trustee, appoint any person or
            persons to be a Receiver of the Collateral and may from time to time
            fix its or their remunerations and may remove any Receiver so
            appointed and appoint another in its place. Where more than one
            Receiver is so appointed, any reference in this Deed to a Receiver
            shall apply to both or all of the Receivers so appointed and the
            appointment shall be deemed to be a joint and several appointment so
            that the rights, powers, duties and discretions vested in the
            Receiver may be exercised jointly by the Receivers so appointed or
            severally by each of them.

      (b)   The Receiver shall be the agent of the Mortgagor and the Mortgagor
            shall be solely responsible for the Receiver's acts or defaults and
            for the Receiver's remuneration and the Receiver shall have all the
            powers conferred from time to time on mortgagees or receivers by law
            or otherwise (but without the restrictions imposed by law or any
            ordinance or other statutory provision in relation to the

                                      -14-

<PAGE>

                                                            [Mortgage of Shares]

            exercise of any power of sale or consolidation) and power on behalf
            and at the cost of the Mortgagor (notwithstanding any liquidation of
            the Mortgagor) to do or omit to do anything which the Mortgagor
            could do or omit to do in relation to the Collateral or any part
            thereof.

      (c)   The Receiver shall in the exercise of the Receiver's powers,
            authorities and discretions conform to the directions and
            regulations from time to time given or made by the Security Trustee.

9.4   POWERS TO BE GIVEN WIDE CONSTRUCTION

      The powers of the Security Trustee and the Receiver hereunder shall be
      construed in the widest possible sense to the intent that the Security
      Trustee and the Receiver shall be afforded as wide and flexible a range of
      powers as possible.

9.5   NO LIABILITY TO ACCOUNT AS MORTGAGEE IN POSSESSION

      Nothing that shall be done by or on behalf of the Security Trustee shall
      render it liable to account as a mortgagee in possession for any sums
      other than actual receipts.

9.6   AMENDMENT

      Any amendment or waiver of any provision of this Deed and any waiver of
      any default under this Deed shall only be effective if made in writing and
      signed by the Security Trustee.

9.7   EVIDENCE OF DEBT

      Any statement of account signed as correct by the Security Trustee showing
      any amount due under the Facility Agreement or under this Deed or under
      any other Finance Document shall, in the absence of manifest error, be
      conclusive evidence of the amount so due.

9.8   SALE OF COLLATERAL

      (a)   Each of the Security Trustee and the Receiver shall be entitled to
            exercise such power of sale in such manner and at such time or times
            and for such consideration (whether payable immediately or by
            instalments) as it shall in its absolute discretion think fit
            (whether by private sale or otherwise) and so that the Collateral
            (or any relevant part thereof) may be sold (i) subject to any
            conditions which the Security Trustee or the Receiver may think fit
            to impose, (ii) to any person (including, without limitation, any
            person connected with the Mortgagor or the Security Trustee) and
            (iii) at any price which the Security Trustee or the Receiver in its
            absolute discretion considers to be the best obtainable in the
            circumstances.

      (b)   If the Security Trustee exercises the rights conferred on it by this
            Clause 9 any sale or disposal of any of the Collateral pursuant to
            those rights shall not be treated as an absolute appropriation of or
            foreclosure on the Collateral to the exclusion of the Mortgagor and
            in extinguishment of its interest therein, unless the Security
            Trustee shall otherwise notify the Mortgagor (whether before or

                                      -15-

<PAGE>

                                                            [Mortgage of Shares]

            after the relevant appropriation or foreclosure has been effected),
            in which latter event any such appropriation or foreclosure shall be
            treated as a sale of the Collateral at a fair market value and the
            Secured Obligations shall be reduced by an equivalent amount.

      (c)   In any disposal pursuant to this Clause 9, the Security Trustee or
            the Finance Parties may, provided that they shall first have used
            reasonable efforts to dispose of the relevant Collateral or rights
            to third parties subject to compliance with any rules or regulations
            laid down by any governmental or other agency or authority,
            themselves purchase the whole or any part of the Collateral or
            rights disposed of free from any rights of redemption on the part of
            the Mortgagor which are hereby waived and released.

9.9   DIVIDENDS

      At any time after the power of sale has arisen, any dividends which have
      been or may be received or receivable by the Security Trustee or the
      Receiver may be applied by the Security Trustee or the Receiver as though
      they were proceeds of sale hereunder.

9.10  PURCHASER NOT BOUND TO ENQUIRE

      Each of the Security Trustee and the Receiver is authorised to give a good
      discharge for any monies received by it pursuant to the exercise of its
      power of sale and no purchaser or other person shall be bound to enquire
      whether the power of sale has arisen as herein provided nor be concerned
      with the manner of application of the proceeds of sale.

9.11  NO LIABILITY FOR LOSSES

      The Mortgagor shall not have any claim against the Receiver or the
      Security Trustee in respect of any loss arising out of the exercise by the
      Security Trustee or the Receiver of their respective powers hereunder
      including without limitation out of any such sale or any postponement
      thereof howsoever caused and whether or not a better price could or might
      have been obtained upon the sale of the Collateral or any part thereof by
      deferring or advancing the date of such sale or otherwise howsoever.

9.12  WAIVER OF PRE-EMPTION RIGHTS

      The Mortgagor hereby irrevocably and unconditionally waives any rights it
      may have under the constitutional documents of the Borrower or otherwise
      to purchase the Shares or Related Assets or other Collateral in the event
      that they are or are proposed to be transferred, sold or otherwise
      disposed of pursuant to the provisions of this Deed.

10.   DIVIDENDS AND VOTING RIGHTS

10.1  After the security under this Deed has become enforceable and subject to
      Clause 10.2, the Security Trustee shall have complete discretion to retain
      the dividends, interest and other moneys received by the Security Trustee
      in respect of the Collateral and to exercise or abstain from exercising
      all voting and other rights and powers attaching to the Collateral as the
      Security Trustee in its absolute discretion thinks fit without being
      liable for any losses which the Mortgagor may suffer as a result thereof
      (except in case

                                      -16-
<PAGE>

                                                            [Mortgage of Shares]

      of gross negligence or wilful default on the part of the Security Trustee)
      and in this respect the Mortgagor will, or will procure its Nominee to act
      or refrain from acting in accordance with the directions given by the
      Security Trustee from time to time.

10.2  The Security Trustee agrees with the Mortgagor that until the security
      under this Deed shall have become enforceable:

      (a)   the Mortgagor shall be entitled to receive and retain all dividends,
            interest or other distributions or payments paid to and received by
            the Mortgagor in respect of the Collateral; and

      (b)   the Mortgagor shall be entitled to exercise all voting and other
            rights and powers attaching to the Collateral or any part thereof
            for all purposes, including but not limited to, exercising any
            option, warrant, conversion right or any other right, power or other
            privilege attaching to the Collateral provided that the same does
            not adversely affect or prejudice the rights of the Finance Parties
            or the security hereby created.

11.   APPLICATION OF PROCEEDS

      All monies received by the Security Trustee or the Receiver hereunder
      shall be applied in or towards satisfaction of the Secured Obligations
      (subject to the prior discharge of all liabilities having priority thereto
      by law) in the following order of priority:-

      (a)   in payment or satisfaction of all costs, charges, expenses and
            liabilities properly incurred and payments made by or on behalf of
            the Security Trustee or the Receiver in connection with the exercise
            of any powers hereunder and in preserving or attempting to preserve
            this security or the Collateral and of all outgoings in respect of
            the Collateral paid by the Security Trustee or the Receiver pursuant
            to this Deed;

      (b)   in payment to the Receiver of all remuneration as may be agreed
            between it and the Security Trustee to be paid to it at, or at any
            time after, its appointment;

      (c)   in or towards reduction of the remaining Secured Obligations in such
            manner as is provided in the Facility Agreement; and

      (d)   surplus (if any) to the Mortgagor.

12.   INDEMNITY

12.1  GENERAL INDEMNITY

      The Mortgagor hereby undertakes with the Security Trustee to indemnify and
      keep indemnified the Security Trustee and each other Finance Party, any
      nominee, agent, officer or employer thereof for whose liability the
      Security Trustee may be answerable, the Receiver and each of them (each an
      "INDEMNITEE") from and against all losses, actions, claims, demands,
      liabilities, costs, charges and expenses which such indemnitee shall
      properly incur in connection with anything done or omitted to be done in
      the

                                     - 17 -
<PAGE>

                                                            [Mortgage of Shares]

      exercise or purported exercise of any powers conferred by this Deed or
      occasioned by any breach by the Mortgagor of any of its covenants or other
      obligations to the Security Trustee hereunder or the perfection,
      preservation or enforcement of the security created by this Deed (unless
      and to the extent that any of the foregoing results directly from the
      fraud, gross negligence or wilful misconduct of that indemnitee).

12.2  CURRENCY INDEMNITY

      (a)   If an amount due to the Security Trustee or any Receiver from the
            Mortgagor under this Deed (a "SUM"), or any order, judgment or award
            given or made in relation to a sum, has to be converted from the
            currency (the "FIRST CURRENCY") in which that sum is payable into
            another currency (the "SECOND CURRENCY") for the purpose of:

            (i)   making or filing a claim or proof against the Mortgagor;

            (ii)  obtaining or enforcing an order, judgment or award in relation
                  to any litigation or arbitration proceedings,

            the Mortgagor shall, as an independent obligation to the Security
            Trustee or such Receiver, indemnify the Security Trustee or such
            Receiver to whom that sum is due against any cost, loss or liability
            arising out of or as a result of the conversion including any
            discrepancy between (A) the rate of exchange used to convert that
            sum from the first currency into the second currency and (B) the
            rate or rates of exchange available to that person at the time of
            its receipt of that sum.

      (b)   The Mortgagor waives any right it may have in any jurisdiction to
            pay any amount under this Deed in a currency or currency unit other
            than that in which it is expressed to be payable.

12.3  PAYMENT AND SECURITY

      The Security Trustee or any Finance Party may retain and pay out of any
      money in the hands of the Security Trustee or such Finance Party all sums
      necessary to effect the indemnity contained in this Clause and all sums
      payable by the Mortgagor under this Clause shall form part of the monies
      hereby secured.

13.   SUSPENSE ACCOUNT

      The Security Trustee may, notwithstanding Clause 11 (Application of
      Proceeds) place and keep any monies received under this Deed, before or
      after the insolvency of the Mortgagor, to the credit of a suspense account
      in order to preserve the rights of the Security Trustee or the Receiver or
      the Lenders to sue or prove for the whole amount in respect of claims
      against the Mortgagor or any other person.

14.   SET-OFF

      (a)   Without prejudice to any right of set-off, combination of accounts,
            lien or other

                                     - 18 -
<PAGE>

                                                            [Mortgage of Shares]

            rights which the Security Trustee or the Receiver is at any time
            entitled whether by operation of law or contract or otherwise, the
            Security Trustee and the Receiver may (but shall not be obliged to)
            set off against any obligation of the Mortgagor due and payable by
            it hereunder without prior notice any moneys held by the Security
            Trustee or such Receiver for the account of the Mortgagorat any
            office of the Security Trustee or such Receiver anywhere and in any
            currency. The Security Trustee or such Receiver may effect such
            currency exchanges as are appropriate to implement such set-off.

      (b)   If the obligations are in different currencies, the Security Trustee
            or such Receiver may convert either obligation at a market rate of
            exchange in its usual course of business for the purpose of the
            set-off.

15.   POWER OF ATTORNEY

15.1  POWER OF ATTORNEY

      The Mortgagor irrevocably appoints the Security Trustee, the Receiver and
      any persons deriving title under either of them by way of security jointly
      and severally to be its attorney (with full power of substitution) and in
      its name or otherwise on its behalf and as its act and deed to sign, seal,
      execute, deliver, perfect and do all deeds, instruments, acts and things
      which may be required or which the Security Trustee or the Receiver shall
      think proper or reasonably expedient for carrying out any obligations
      imposed on the Mortgagor hereunder or for exercising, following the
      security constituted by this Deed becoming enforceable, any of the powers
      conferred by this Deed or in connection with any sale or disposition of
      the Collateral or the exercise of any rights in respect thereof or for
      giving to the Security Trustee and the Receiver the full benefit of this
      security and so that this appointment shall operate to authorise the
      Security Trustee and the Receiver to do on behalf of the Mortgagor
      anything it can lawfully do by an attorney. The Mortgagor ratifies and
      confirms and agrees to ratify and confirm any deed, instrument, act or
      thing which such attorney or substitute may execute or do in exercising
      its powers under this Clause.

15.2  DELEGATION

      The Security Trustee and/or the Receiver may delegate to any person all or
      any of the rights or powers conferred on it by this Deed or by law. Any
      such delegation may be made upon such terms and conditions (including
      power to sub-delegate) as the Security Trustee or the Receiver thinks fit.

16.   FURTHER ASSURANCE

      The Mortgagor agrees that at any time and from time to time upon the
      written request of the Security Trustee it will promptly and duly execute
      and deliver any and all such further instruments and documents as the
      Security Trustee may reasonably require for the purpose of obtaining the
      full benefit of this Deed and of the rights and powers herein granted.

                                     - 19 -
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                                                            [Mortgage of Shares]

17.   NOTICES

17.1  NOTICES

      Any notice or communication under or in connection with this Deed shall be
      in writing and shall be delivered personally or by prepaid letter (airmail
      if available) or facsimile transmission to the addresses or facsimile
      numbers set out below or at such other address as the recipient may have
      notified to the other parties in writing. Proof of posting or despatch of
      any notice or communication to any party hereto shall be deemed to be
      proof of receipt:-

      (a)   in the case of a letter, on the fifth Business Day after posting if
            airmail or second Business Day if local mail;

      (b)   in the case of a facsimile transmission, on the Business Day
            immediately following the date of despatch with confirmed facsimile
            report.

      All communications or other correspondence between the Mortgagor and any
      of the Lenders in connection with this Deed shall be made through the
      Security Trustee.

17.2  ADDRESSES

      Notices or communications shall be sent to the following addresses:-

      To the Mortgagor:-

      Address   c/o Asia Netcom Corporation Limited
                46/F Cheung Kong Center
                2 Queen's Road Central
                Hong Kong
      Fax       (852) 2121 2929
      Attention Gregory Freiberg/Wenlong Sun

      To the Security Trustee:-

      Address   Industrial and Commercial Bank of China (Asia) Limited
                10/F., ICBC Asia Building
                122-126 Queen's Road Central
                Hong Kong

      Fax       (852) 2851 9361
      Attention Ms. Esther Cheng/Ms. Amy Wong

17.3  Each notice or document referred to in this Deed or to be delivered under
      this Deed shall be in the English language.

                                     - 20 -
<PAGE>

                                                            [Mortgage of Shares]

18.   WAIVERS, AMENDMENTS AND CONSENTS, REMEDIES, SEVERABILITY, ASSIGNMENT AND
      COUNTERPARTS

18.1  WAIVERS

      No failure or delay on the part of the Security Trustee or any Lender to
      exercise any power, right or remedy under this Deed shall operate as a
      waiver thereof, nor shall any single or partial exercise by the Security
      Trustee or any Lender of any power, right or remedy preclude any other or
      further exercise thereof or the exercise of any other power, right or
      remedy.

18.2  AMENDMENTS AND CONSENTS

      (a)   Any amendment of any provision of this Deed shall only be effective
            if made in accordance with the provisions of this Deed and the
            Mortgagor and the Security Trustee so agree in writing and any
            waiver of any breach or default under this Deed shall only be
            effective if the Security Trustee acting on the instructions of the
            Lenders or the Majority Lenders, as the case may be, agrees in
            writing. Any consent by the Security Trustee under this Deed must be
            made in writing.

      (b)   Any such waiver or consent may be given subject to any conditions
            thought fit by the Security Trustee acting or the instructions of
            the Lenders or the Majority Lenders, as the case may be, and shall
            be effective only in the instance and for the purpose for which it
            is given.

18.3  REMEDIES

      The remedies provided in this Deed are cumulative and are not exclusive of
      any remedies provided by law.

18.4  SEVERABILITY

      If any provision of this Deed is prohibited or unenforceable in any
      jurisdiction such prohibition or unenforceability shall not invalidate the
      remaining provisions hereof or affect the validity or enforceability of
      such provision in any other jurisdiction.

18.5  ASSIGNMENT

      The Security Trustee may assign its rights under this Deed in accordance
      with the provisions of the Facility Agreement. The Mortgagor may not
      assign any of its rights hereunder without the prior written consent of
      the Security Trustee.

18.6  COUNTERPARTS

      This Deed may be executed in any number of counterparts including by
      facsimile and all of which taken together shall constitute one and the
      same instrument, and any party hereto may execute this Deed by signing any
      such counterpart.

18.7  It is intended that this document takes effect as a deed notwithstanding
      the fact that a party may only execute this document under hand.

                                     - 21 -
<PAGE>

                                                            [Mortgage of Shares]

19.   GOVERNING LAW AND JURISDICTION

19.1  GOVERNING LAW

      This Deed shall be governed by and construed in accordance with the laws
      of Bermuda.

19.2  SUBMISSION TO JURISDICTION

      For the benefit of the Security Trustee and the other Finance Parties, the
      Mortgagor irrevocably agrees that the courts of the Bermuda and Hong Kong
      are to have non-exclusive jurisdiction to settle any disputes which may
      arise out of or in connection with this Deed and that, accordingly, any
      legal action or proceedings arising out of or in connection with this Deed
      ("PROCEEDINGS") may be brought in those courts and the Mortgagor
      irrevocably submits to the jurisdiction of those courts.

19.3  OTHER JURISDICTIONS

      Nothing in this Clause shall limit the right of the Security Trustee to
      take proceedings against the Mortgagor in any other court of competent
      jurisdiction nor shall the taking of Proceedings in one or more
      jurisdictions preclude the Security Trustee from taking Proceedings in any
      other jurisdiction, whether concurrently or not.

19.4  WAIVER OF INCONVENIENT FORUM

      The Mortgagor irrevocably waives any objection which it may at any time
      have to the laying of the venue of any Proceedings in any court referred
      to in this Clause 19 (Governing Law and Jurisdiction) and any claim that
      any such Proceedings have been brought in an inconvenient forum.

19.5  PROCESS AGENT

      The Mortgagor hereby irrevocably appoints Asia Netcom Asia Pacific
      Commercial Limited of 46th Floor, Cheung Kong Centre, 2 Queen's Road,
      Central, Hong Kong to receive, for it and on its behalf, service of
      process in any Proceedings in Hong Kong. Such service shall be deemed
      completed on delivery to the process agent whether or not it is forwarded
      to and received by the Mortgagor. If for any reason the process agent
      ceases to be able to act as such or no longer has an address in Hong Kong,
      the Mortgagor irrevocably agrees to appoint a substitute process agent
      acceptable to the Security Trustee, and to deliver to the Security Trustee
      a copy of the new process agent's acceptance of that appointment, within
      30 days.

19.6  SERVICE

      The Mortgagor irrevocably consents to any process in any Proceedings
      anywhere being served by mailing a copy by post in accordance with the
      Clause 17 (Notices) provision of this Deed. Nothing shall affect the right
      to serve any process in any other manner permitted by law.

                                     - 22 -
<PAGE>

                                                            [Mortgage of Shares]

19.7  Waiver of Immunities

      To the extent that the Mortgagor has or hereafter may acquire any immunity
      (sovereign or otherwise) from any legal action, suit or proceeding, from
      jurisdiction of any court or from set-off or any legal process (whether
      service or notice, attachment prior to judgment, attachment in aid of
      execution of judgment, execution of judgment or otherwise) with respect to
      itself or any of its property, the Mortgagor hereby irrevocably waives and
      agrees not to plead or claim such immunity in respect of its obligations
      under this Deed.

IN WITNESS whereof this Deed has been executed by the parties hereto and is
intended to be and is hereby delivered by the Mortgagor as a deed on the day and
year first above written.

                                      -23-
<PAGE>

                                                            [Mortgage of Shares]

                                   SCHEDULE 1

                            PARTICULARS OF THE SHARES

<TABLE>
<CAPTION>
                                                           REGISTERED
                                                        SHAREHOLDERS AND
                                DESCRIPTION AND         NUMBER OF SHARES
    NAME OF COMPANY             NUMBER OF SHARES             HELD
<S>                      <C>                            <C>
Asia Netcom Corporation  120,000,000 shares of US$0.01  China Netcom Corporation
Limited                  each                           International Limited
                                                        (120,000,000 shares)
</TABLE>

                                      -24-
<PAGE>

                                                            [Mortgage of Shares]

                                   SCHEDULE 2

                         FORM OF INSTRUMENT OF TRANSFER

                             INSTRUMENT OF TRANSFER

                         ASIA NETCOM CORPORATION LIMITED

We, China Netcom Corporation International Limited of [    ] in consideration of
the Sum of ____________ hereby paid to me by ________________ of
______________________ (the "TRANSFEREE"), do hereby transfer to the said
Transferee the _______ Shares standing in our name in the Register of Members of
Asia Netcom Corporation Limited to hold unto the said Transferee, its executors,
administrators or assigns, subject to the several conditions upon which we hold
the same at the time of execution hereof. And we the said Transferee do hereby
agree to take the said Shares subject to the same conditions.

Witness our hands the day of , .

Witness to the signature(s) of

Name
----------------------------------------

Address
----------------------------------------

----------------------------------------    ------------------------------------

                                            CHINA NETCOM CORPORATION
                                            INTERNATIONAL LIMITED

----------------------------------------

Witness to the signature(s) of

Name
----------------------------------------

Address
----------------------------------------

----------------------------------------    ------------------------------------

                                            [THE TRANSFEREE]
----------------------------------------    ------------------------------------

                                      -25-
<PAGE>

                                                            [Mortgage of Shares]

                                   SCHEDULE 3

                          FORM OF LETTER OF RESIGNATION

To:   The Board of Directors
      of Asia Netcom Corporation Limited (the "COMPANY")

                                                        Date: __________________

I, [Name of director/secretary], hereby resign my position as a
director/secretary of the Company with effect from and waive all claims to fees
or compensation in connection with or arising from my employment and/or
resignation save as provided by law in Bermuda.

SIGNED, SEALED AND DELIVERED by
[Name of director/secretary]
in the presence of:

   Signature of witness:____________________________

   Name of witness:     ____________________________

   Address of witness:  ____________________________

                                      -26-
<PAGE>

                                                            [Mortgage of Shares]

                                   SCHEDULE 4

                           FORM OF WRITTEN RESOLUTION

                         ASIA NETCOM CORPORATION LIMITED

Written Resolutions of all the Directors of the Company dated the day of

We, the undersigned, being all the Directors of the Company, hereby resolve:-

1.    Appointment of Directors/Secretary

      That the following persons be appointed as Directors and/or Secretary of
      the Company with immediate effect:-

2.    Resignation of Directors

      That the Letters of Resignation signed by [names of all
      Directors/Secretary] be accepted and that the same shall take effect
      forthwith.

[signed by all Directors]

----------------------------                -----------------------------

                                      -27-
<PAGE>

                                                            [Mortgage of Shares]

                                   SCHEDULE 5

                 FORM OF AUTHORISATION FROM DIRECTORS/SECRETARY

                                                                          [Date]

To:  Industrial and Commercial Bank of China (Asia) Limited
     10/F., ICBC Asia Building
     122-126 Queen's Road Central
     Hong Kong

We are, at the date hereof, all the directors and the sole secretary of Asia
Netcom Corporation Limited (the "COMPANY").

We refer to (a) the Facility Agreement dated [-], 2004, as amended and restated
by the Supplemental Amendment and Restatement Deed dated [-], 2004 (the
"FACILITY AGREEMENT") entered into between (1) the Company, as borrower (2) the
banks and financial institutions named therein as lender (the "LENDERS") and (3)
Industrial and Commercial Bank of China (Asia) Limited as arranger and facility
agent (b) the Deed of Mortgage of Shares dated [-], 2004 (the "MORTGAGE") made
between China Netcom Corporation International Limited as mortgagor and
yourselves as Security Trustee in relation the Shares in the Company; and (c) an
undated written resolution of all the directors and secretary of the Company
signed by us resolving to approve the appointment of new director(s) and/or new
secretary of the Company and the resignation of us as directors and/or secretary
of the Company (the "WRITTEN RESOLUTIONS").

We hereby irrevocably authorise you, at any time after the Mortgage has become
enforceable without our consent, to nominate such person(s) as you may in your
absolute discretion determine to be the director(s) and secretary of the Company
and to complete the written resolutions in such manner as you may think fit,
including to insert the date (which can be any date after the date hereof) and
the name(s) of the additional director(s) and/or the secretary. We confirm and
declare that the written resolutions as completed by you shall in all respects
be valid and effective as a board resolutions of the Company on the date and to
the effect as stated therein, and be binding on us and on the Company.

We also refer to the undated letters of resignation as directors and/or the
secretary of the Company signed by us. Each of us hereby irrevocably authorises
you at any time after the Mortgage has become enforceable without our consent to
insert a date (which can be any date after the date hereof) on the letters of
resignation, upon which our resignation of directorship and/or as secretary
shall take immediate effect.

[signed by all Directors and Secretary]

--------------------------------            -------------------------------

--------------------------------            -------------------------------

                                      -28-
<PAGE>

                                                            [Mortgage of Shares]

                                   SCHEDULE 6

                          FORM OF LETTER OF UNDERTAKING

                                                                          [Date]

To:  Industrial and Commercial Bank of China (Asia) Limited
     10/F., ICBC Asia Building
     122-126 Queen's Road Central
     Hong Kong

We, the undersigned Directors of Asia Netcom Corporation Limited (the
"COMPANY"), refer to the Deed of Mortgage of Shares dated [ ], 2004 and made
between China Netcom Corporation International Limited as mortgagor and
yourselves as Security Trustee, and in pursuance thereof hereby undertake not to
appoint any additional or substitute Directors or Secretary of the Company
without your written consent.

[signed by all Directors]

--------------------------------            -------------------------------

--------------------------------            -------------------------------

                                      -29-
<PAGE>

                                                            [Mortgage of Shares]

                                   SCHEDULE 7

                       FORM OF ACKNOWLEDGEMENT OF NOMINEE

To: Industrial and Commercial Bank of China (Asia) Limited

                                                         _________________, 2004

Dear Sirs,

RE: ASIA NETCOM CORPORATION LIMITED (THE "COMPANY")

I/We acknowledge that by a deed of mortgage of shares dated [___________], 2004
(the "SHARE MORTGAGE"), China Netcom Corporation International Limited (the
"MORTGAGOR") has agreed to mortgage the entire issued share capital of the
Company (the "SHARES") of which the Mortgagor is the sole beneficial owner to
you.

I/We hereby agree to deposit with you the certificates in respect of the
Share(s) of which I/we are the registered holder and to execute and deliver to
you such instruments of transfer, contract note, and other documents in respect
of such Share(s), including a power of attorney to sell, transfer or otherwise
dispose of the same, in such form as you may at any time and from time to time
require.

I/We [jointly and severally], until such time as I/we receive written notice
from you stating that the Share Mortgage has been released or otherwise
discharged:

1.    warrant that I/we are the registered holder(s) of a total of [____]
      [ordinary share(s)] of $[_______] each, in the Company;

2.    confirm that I/we hold such share(s) as nominee(s) on trust for you and
      that I/we shall hereafter hold such share(s) on you behalf as mortgagee in
      accordance with the terms of the Share Mortgage; and

3.    grant to you a power of attorney in the terms of clause 15 of the Share
      Mortgage as if references therein to the Mortgagor were references to
      me/us and undertake to grant you such further powers of attorney in such
      form as you may at any time and from time to time require.

EITHER:

SIGNED, SEALED AND DELIVERED        )
by [___________________________]    )
in the presence of:                 )

OR:

THE COMMON SEAL of                  )
[___________________________]       )
was hereunto affixed in             )
the presence of:                    )

                                      -30-
<PAGE>

                                                            [Mortgage of Shares]

                                 EXECUTION PAGE

THE MORTGAGOR

SIGNED, SEALED AND DELIVERED                )
as a Deed by its duly authorised attorney   )
                                            )
for and on behalf of                        )
CHINA NETCOM CORPORATION                    )
INTERNATIONAL LIMITED                       )
in the presence of:-                        )

THE SECURITY TRUSTEE

SIGNED BY                                   )
for and on behalf of                        )
INDUSTRIAL AND COMMERCIAL BANK              )
OF CHINA (ASIA) LIMITED                     )
in the presence of:                         )

                                      -31-