**EXHIBIT 4.12**

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PCCW SERVICES LIMITED**39th Floor, PCCW Tower****TaiKoo Place, 979 King's Road****Quarry Bay, Hong Kong****(the "Company")**

The Board of Directors Mandarin Communications Limited 13th Floor, Warwick House TaiKoo Place 979 King's Road Quarry Bay Hong Kong (the **"Borrower")**

9 September 2005 

Dear Sirs 

Inter-Company Facility

The Company is pleased to confirm that it will make available to the Borrowerthe following facilities: 

(i) a term loan facility in theprincipal amount of HK$57 million (the **"Facility A");**

(ii) a term loan facility in theprincipal amount of HK$299.5 million (the **"Facility B");**and 

(iii) a term loan facility in theprincipal amount of HK$317 million (the **"Facility C"**and, together withthe Facility A and B, the **"Facilities"),**

upon the following terms and conditions: 

1. **    Availability**

The full amount of each of the Facilities shall be madeavailable by the Company to the Borrower for a period commencing on the date ofthis letter and ending on 30 June 2006, or such later date as the Company andthe Borrower shall agree, following the delivery by the Borrower to the Companyof a drawdown notice substantially in the form set out in the Schedule hereto.

Amounts which are drawn down and repaid under the Facilities shall not beavailable for further drawdown. 

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**2.**    Purpose**

Any and all amounts drawn down by the Borrower under the Facilities shall beapplied by the Borrower as follows: 

Facility A -     for 3G network expansion, mainly for an addition of 48 sites, development fornew message service and ring back tone service. 

Facility B -   for 2G network upgrade, mainly for End of Life issue, expansion of 200K voicecapacity and 50K GPRS data capacity, and coverage enhancement by adding 200 cellsites. 

Facility C -     for 3G network expansion, mainly for an addition of 243 sites, another switchingcenter and service platform upgrade and migration. 

3. **    Term**

The term of the Facilities shall be 3 years. 

4. **    Interest**

Amounts drawn down under the Facilities shall bear interest at a rate perannum equal to the aggregate of the Cost of Funds and 0.25%. 

For this purpose, the **"Cost of Funds"**means the ratenotified by the Company to the Borrower from time to time as being thereasonable cost which would be incurred by the Company in funding an advanceunder the Facilities from amounts borrowed by the Company, irrespective ofwhether the actual advance is funded from amounts borrowed by the Company orfrom the Company's own internal resources. 

The Borrower shall on 31st March, 30th June, 30th Septemberand 31st December of each calendar year pay to the Company any interest whichhas accrued on amounts drawn down under the Facilities up to and including thedate of such payment. 

5. **    Drawings**

The Facilities will be available for drawdown on a monthlybasis and the first draw down date will be the date of this letter, or suchlater date as the Company and the Borrower shall agree. The drawdown noticeshould be submitted together with the monthly funding requirement analysis asprepared by the Borrower. 

To the extent that the full amount of the Facilities is notdrawn down on the date of this letter, the remaining balance of the Facilitiesmay be drawn down at any time during the availability period for the relevantFacility referred to in paragraph 1 above, by not less than 3 business day priorwritten notice of draw down. 

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6. **    Interim Repayments of Principal**

The Borrower shall on each Interim Repayment Date repay tothe Company a sum equal to the amount by which the Borrower's Surplus Cashexceeds US$15,000,000 on the Cash Calculation Date immediately preceding suchInterim Repayment Date. For the avoidance of doubt, if the Borrower's SurplusCash on any Cash Calculation Date does not exceed US$15,000,000, the Borrowershall not be required to make any payment to the Company on the InterimRepayment Date immediately following that Cash Calculation Date. 

Amounts paid by the Borrower to the Company pursuant to thisparagraph 6 shall be applied towards repaying the principal amount of theFacilities (pro rata the amount outstanding under each of the Facilities). 

For the purposes of this letter: 

a **"business day"**means a day, other than a Saturday or a Sunday, onwhich commercial banks are open for business in Hong Kong; 

a **"Cash Calculation Date"**means the last day of a calendar month; 
**"Hong Kong" means the Hong Kong Special Administrative Region of thePeople's Republic of China; 

an **"Interim Repayment Date"**means the date falling 15 days followingthe end of each calendar month (or, where such date is not a business day, thenext following business day); and 
**"Surplus Cash" means all cash at bank, cash in hand andsecurities readily convertible into cash which are held by the Borrower,calculated by reference to the management accounts of the Borrower as at therelevant Cash Calculation Date. 

7. **    Final Repayment**

The Borrower shall repay all amounts borrowed under theFacilities, together with all unpaid interest which has accrued thereon, on thethird anniversary of the date of this letter or, if that third anniversary isnot a business day, on the next following business day. 

8. **    Payments**

All payments to be made by the Borrower under this letter must be made on thedates referred to above to such account as the Company may from time to timespecify. 

9.     **Fees and Expenses**

The Borrower shall be responsible for payment of fees inarranging and making available the Facilities by the Company, which amount shallbe mutually agreed by both the Company and the Borrower and shall be payable bythe Borrower upon the Company giving one month's written notice to the Borrower.

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10.    **Governing Law**

The terms of this letter shall be governed by and construed in accordancewith the laws of Hong Kong. 

Please confirm your agreement to the foregoing terms and conditions bycounter-signing the enclosed copy of this letter and returning the same to us.

Yours faithfully 

For and on behalf of **PCCW SERVICES LIMITED**
              Name: Alexander Anthony ArenaTitle: Director / ~~Authorised    Signatory~~
 

We confirm our agreement to the above terms and conditions. 

For and on behalf of **MANDARIN COMMUNICATIONS LIMITED**
              
 

 

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**SCHEDULE 

Form of Drawdown Notice
*[Date]

To: **    PCCW Services Limited            39th Floor, PCCWTower            TaiKoo Place, 979King's Road            Quarry Bay, HongKong**
**Inter-Company Facility Letter (the "Facility Letter") dated [ ] September2005

We refer to the Facility Letter and hereby give you notice that we wish todraw down the sum of  HK$[*amount*]**on [*date*]**under the [*Facility A/Facility B/Facility C*]***(as definedtherein). The funds should be credited to [*name and number of account*]**with [*insert bank details*]*.*

Yours faithfully 

For and on behalf of **Mandarin Communications Limited**
* 

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*Delete as appropriate

 

 

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