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Four years after the debut of the original iPhone, one of the biggest markets in the world still isn’t being fully served by Apple’s iconic device. With 896 million mobile phone users in China, 106 million served by China Telecom may finally get some relief by the end of 2011.
Reuters is reporting that China Telecom is planning to offer the iPhone to its 106 million subscribers by year’s end, making it the second Chinese carrier to do so in a potential market of 896 million mobile phone users. The move is viewed as a way for the smallest of China’s three mobile carriers to attract “high-end 3G users in a competitive market.”
"The reason telecom operators are fighting for the iPhone business is because everybody is trying to grab as many 3G users as possible," explains Jane Wang, an analyst with Ovum, a research firm based in the U.K. "The only way to keep costs down is to build up such a user base."
China Unicom is currently the only carrier offering the iPhone in China, having signed a three-year agreement with Apple in 2009. However, unlike the revenue-sharing agreements with AT&T here in the United States, the iPhone isn’t a particularly strong profit generator for China Unicom.
"Unicom is selling iPhones, but there was no particular boost to their earnings from that," reveals Patrick Yiu, director at CASH Asset Management. "Even if China Telecom gets the iPhone deal, it will still depend on whether their system can support it and on the details of the contract."
Competitor China Telecom is using older CDMA technology, which finally came to the iPhone with the release of the Verizon Wireless model earlier this year. With that technological hurdle now behind them, Apple is looking to expand into markets the previous GSM-only model was unable to tap into.
"It's expected to happen this year,” a source close to the company revealed to Reuters, referring to the arrival of the CDMA iPhone on Chinese shores. “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.”
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(Image courtesy of Reuters)