China Telecom to offer iPhone in the Last Quarter

Reports said on Wednesday that China Telecom Corp Ltd is planning to launch Apple Inc iPhone to its 106 million subscribers starting November this year.

This leap would actually help China Telecom, the smallest among the three Chinese telecommunications operators, to solidify their 3G market in China. Although the company operates the country’s largest fixed-line network, it is a newbie to the mobile market.

“The reason telecom operators are fighting for the iPhone business is because everybody is trying to grab as many 3G users as possible,” said Jane Wang, an analyst at UK-based research firm Ovum. “The only way to keep costs down is to build up such a user base.”

China Telecom’s shares, which have risen by about a fifth this year, extended earlier gains after Reuters exclusively reported the plan, rising as much as 5.5 percent to an intraday high of HK$4.95 and outperforming the Hang Seng Index’s 1 percent gain.

Furthermore, China Telecom said Wednesday that its president and CEO, Shang Bing, resigned to become the deputy minister of the Ministry of Industry and Information Technology.

Currently, China Unicom is the only operator that offers iPhone after signing a three-year agreement with Apple in 2009 which is not based on a revenue-sharing scheme, unlike the common deal Apple has in any of the countries that offer its popular iDevice.

In May, China Telecom’s chairman, Wang Xiaochu, told a news conference that the carrier had contacted Apple to launch the iPhone based on CDMA (code division multiple access) technology.

“It’s expected to happen this year. China Telecom already has the required technology and it all hinges on the content of the agreement. As we all know, it’s not easy to negotiate with Apple,” a source close to the company, speaking on condition of anonymity, told reporters.

It is expected that China Telecom will introduce the iPhone starting November. However, officials declined to comment on the rumor.