China Telecom, the smallest of the three telecoms operators in China – but with more subscribers than Verizon, the US's second-largest carrier – is to start selling Apple's iPhone by the end of the year, according to sources.
Apple would have to sell the CDMA version of its phone, presently sold through Verizon in the US, to work with the systems used by China Telecom. But the move could potentially more than double the number of potential buyers of the device, which was only introduced in January: China Telecom has more CDMA subscribers – 105.9 million in May – than Verizon, which was the first carrier to get the CDMA iPhone this year.
The move will also help China Telecom cement more 3G users in a competitive market in which handset subsidies offered by carriers are squeezing margins. China has 896 million mobile phone users, a number bigger than the entire population of Europe. There are three telecommunications operators: China Mobile Ltd , China Unicom and China Telecom.
So far, China Unicom is the only operator to sell iPhones after signing a three-year agreement with Apple in 2009, although it is not based on a revenue-sharing scheme, unlike some other operators in other countries. China Unicom uses GSM technology, the same as that used in the versions on AT&T and European carriers.
Apple reports its third-quarter results next week. Analysts are forecasting that it will have sold between 15m and 20m iPhones, with an average of 17m. In the first quarter of the year it sold 18.6m. It is expected to unveil at least one new iPhone this September.
In May, China Telecom 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. China Telecom was expected to introduce the iPhone in November, said another source.