SecProbe.io

CORRESP
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July 22, 2005

  Mr. Larry Spirgel, Assistant
  Director

  Mr. Michael Henderson, Staff Accountant

  Mr. Dean Suehiro,
Senior Staff Accountant

Division of Corporation Finance

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

FILED VIA EDGAR

      Re:

      PCCW Limited
      Form 20-F for the fiscal year ended December 31,

      2004 filed
      on May 12, 2005

  Dear Mr. Spirgel, Mr. Henderson
and Mr. Suehiro,

            Reference
  is made to the letter received from the staff of the United States Securities
  and Exchange Commission (the “Commission”) dated July 11, 2005 regarding
  the Form 20-F for the fiscal year ended December 31, 2004 (the “Form 20-F”)
  filed by PCCW Limited (the “Company”) on May 12, 2005.

            Set
  forth below are the Company’s responses to the comments raised by the
  staff. The comments are repeated below in bold and followed by the Company’s
  response. Unless otherwise defined herein, capitalized terms used in this letter
  shall have the same meanings assigned to those terms in the Form 20-F. Page
  numbers below refer to the Form 20-F. This letter is the Company’s sole
response to the staff’s comments, and the Company has not amended the Form 20-F.

Capacity Prepayment Agreement, page 51

    1.
    Please
          tell us how you accounted for the write-off of the capacity prepayment
          under US GAAP and the basis for the accounting. It is
          unclear to us why you are writing off the pre-purchased capacity when
          Reach is still providing you with the capacity under the connectivity
    agreements.

          In
  April 2003, in connection with a refinancing of Reach’s US$1,500 million
  syndicated term loan facility, the Company, one of its wholly-owned subsidiaries
  and, among others, Telstra Corporation Limited (“Telstra”) entered
  into the Capacity Prepayment Agreement dated April 15, 2003 (“CPP”). Although
  the Company and its subsidiaries (“PCCW Group”) and Telstra were
  making purchases from Reach under ongoing connectivity purchase agreements,
  PCCW Group and Telstra were precluded from utilizing the prepayment made under
  the CPP to settle their purchases until Reach had “surplus cash”.
  The “surplus cash” was determined in accordance with a
complex formula set out in the CPP whereby “surplus cash” is equal
to the excess of the quarter end balance of cash

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and cash equivalents over
    the quarter end cash requirements which includes principal and interest payments
    on its bank debt. Only in the event of any surplus cash would the Company and
    Telstra be able to utilize this prepayment to settle their capacity purchases.
    Therefore, both the Company and Telstra would have to make cash payments for
  their ongoing capacity purchases until Reach generated any surplus cash.

            Reach’s
  financial condition continued to deteriorate after April 2003. Prices
  for international voice and data carriage continued to fall and the growth
  in usage was not sufficient to compensate for the loss in revenue caused by
  the price reductions. As part of the annual budgeting process, the cash flow
  projections by Reach management indicated that it would incur negative debt-free
  cash flows from 2004 to 2008. In light of the above and Reach’s 2003 operating
  results, the Company was uncertain that Reach would be able to continue as
  a going concern, which was confirmed in Reach’s audit report for
  the year then-ended. This had led Reach, amongst other things, to negotiate
  with banks for a further debt restructuring, including the possibility of forgiving
  part of its loan. Upon completion of an impairment assessment, the Company
  made the decision to fully provide for its  remaining interest in Reach as
  at December 31, 2003, including the amounts paid by the Company under the
  CPP as it was highly unlikely that Reach would ever have any surplus cash as
  determined in the CPP.

  Item 5. Operating
  and Financial Review and Prospectus, page 53

    2.
    We
        note your presentation of Adjusted EBITDA and Adjusted EBITDA margin.
        Please expand your future filings to disclose the substantive reasons
          why you believe the presentation of these measures provide useful information
        to investors regarding your operating performance and liquidity. Yon
        must also clearly explain how your measure of Adjusted EBITDA differs
        from EBITDA and reconcile these measures to the most directly comparable
        GAAP measures, net income (loss) and cash flows from operating activities.
    Please address this comment throughout your filing.

          The
  Company believes that Adjusted EBITDA provides useful information to investors
  and facilitates industry comparison by investors because, as stated on page
    53, it is commonly used in the telecommunications industry worldwide as an
    indicator of operating performance, leverage and liquidity. Page 53 also
    contained an explanation of the Company’s
  calculation of Adjusted EBITDA and its reason for including this measure. On
  page 89, the Company provided a reconciliation of Adjusted EBITDA to net cash
inflow from operating activities.

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          In
    its future filings, the Company will clarify the substantive reasons for
    presenting Adjusted EBITDA and Adjusted EBITDA margin and the
  difference between Adjusted EBITDA and EBITDA; and provide a reconciliation
    of Adjusted EBITDA to net income (loss). The Company believes that these
    new measures will help investors to better
  evaluate the Adjusted EBITDA presented.

  Consolidated
  Income Statements,  page F-3

    3.
    See
        your line item, “Operating profit before net gains on investments,
        provisions for impairment losses and restructuring costs.” Please
        confirm to us that the presentation of this line item on the consolidated
        income statements is either required or expressly permitted by the standard-setter
        that establishes Hong Kong GAAP. Please see question 28 of our frequently
        asked questions regarding the use of Non-GAAP financial measures
    available on our website at http://www.sec.gov/divisions/corpfin/faqs/congaapfaq.htm.

          The line item “Operating profit before net gains on investments, provisions for impairment losses and restructuring costs” is
  not prohibited by the standard setter that established Hong Kong GAAP. The
  Company has not received any queries raised by Hong Kong regulators on
presenting this line item on the face of consolidated income statement.

            In
  accordance with paragraph 79 of the Statement of Standard Accounting Practice
  1 (“SSAP 1”) “Presentation of Financial Statements” issued by the Hong Kong Institute of Certified Public Accountants, “additional
  line items, headings, sub-totals and further analysis of line items should
  be presented on the face of the income statement when required by a Statement
  of Standard Accounting Practice, or when such presentation is necessary to
  give a true and fair view of the enterprise’s financial statements”. Also,
  Paragraph 82 of SSAP 1 states that “additional line items are included on
  the face of the income statement and the descriptions used and the ordering
of items are amended when this is necessary to explain the elements of performance”.

            Due
  to the significant amounts of investment provision and impairment provisions
  made over the past years, the Company believes it should separately
disclose the significant elements of the financial statements in order to present
a true and fair view of the Company’s financial performance.

            Further
  and significantly, upon changes to the Hong Kong Financial Reporting Standards
  becoming effective from January 1, 2005, the Company will not include a line
  item for “Operating
  profit before net gains on investments, provisions for impairment losses and
restructuring costs” in its future financial statements.

  p.3

            If
    you have any questions regarding the Form 20-F, please call Mr. Steve Lam
    at (852) 2888 3083.

       Very
      truly yours,

       PCCW
      Limited

      By:
      /s/
      Alexander Anthony Arena

      Name:
      Alexander
      Anthony Arena

      Title:
      Group
      Chief Financial Officer

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