Apple’s may partner with China Telecom to boost its presence in the world’s biggest smartphone market by the end of 2011 and analysts have pointed out that although the carrier got prestige out of selling the handset, it did not boosts its earnings significantly. China Telecom is one of three mobile operators in the country and recently it has been known predominantly as the largest fixed-line network provider in China. There have also been rumours that China Mobile, which is bigger than China Telecom, may start to sell iPhones as early as September…………..
The move would help China Telecom, the smallest of the country’s three telecommunications operators, cement more high-end 3G users in a competitive market in which handset subsidies offered by carriers are squeezing margins. China Telecom operates the country’s largest fixed-line network and is a relative newcomer 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. Separately on Wednesday, China Telecom said in a statement that its president and chief operating officer, Shang Bing had resigned to become deputy minister of the Ministry of Industry and Information Technology.
China has 896 million mobile phone users, which is bigger than the entire population of Europe. Its three telecommunications operators are China Mobile Ltd, China Unicom and China Telecom. China Unicom is the only operator to offer the iPhone after signing a three-year agreement with Apple in 2009. Its deal with Apple is not based on a revenue-sharing scheme, unlike some operators in other countries. For example, in the United States, Apple has a revenue-sharing agreement with AT&T Inc on iPhone sales. “Unicom is selling iPhones, but there was no particular boost to their earnings from that,” said 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.” China Telecom is expected to introduce the iPhone in November, declining to be identified because he was not authorized to speak to the media. In June, a media report said bigger rival China Mobile could offer iPhones from September, although analysts said it was unlikely that Apple would support the carrier’s TD-SCDMA (time division synchronous code division multiple access) technology. A more likely scenario was for Apple to support China Mobile‘s 4G LTE (long-term evolution) technology, which would only be available either in late 2012 or 2013, they said.