China Telecom 3G Drive Set For Boost With iPhone 4S 中国电信3G推出电信版iPhone 4S

By newsdoug on January 31, 2012

China Telecom set for lift with iPhone deal It’s not exactly news at this point, but Chinese media are reporting that China Telecom (HKEx: 728; NYSE: CHA), the most aggressive of China’s 3 mobile carriers in the 3G space, has finally reached a deal to begin selling Apple’s (Nasdaq: AAPL) iPhone 4S on its network, with sales likely to begin sometime in the first quarter, possibly as soon as February. (English article; Chinese article) Talks for this deal have been going on for months and reported frequently in the media, and the debut would be at least a month behind the official iPhone 4S launch in China by one of the nation’s other carriers, China Unicom (HKEx: 762; NYSE: CHU) earlier this month. Still, the latest news was apparently enough to spook investors, with Unicom stock shedding 5 percent in Monday in Hong Kong trade and falling even more in overnight trade in New York. Apple’s iPhones are extremely popular in China, and security concerns over long lines at one Beijing Apple store actually led it to cancel its plans to sell the phone there earlier this month, resulting in some mild skirmishes. (previous post) That fact, combined with China Telecom’s generally aggressive approach to 3G, clearly has investors excited that China’s smallest mobile carrier will be able to further boost its momentum in the 3G space to take even more market share from Unicom and China Mobile (HKEx: 941; NYSE: CHL), the nation’s largest mobile carrier. China Telecom saw its share of China’s 3G market zoom to 28 percent by the end of 2011 from just 19 percent when the year began, as it took advantage of inferior technology at China Mobile and management missteps at Unicom to steal share from both of its rivals. The gains have brought China Telecom to within spitting distance of Unicom, whose 3G market share now stands at about 30 percent. If the iPhone deal finally does happen, which looks likely, and a launch occurs in February or March, I wouldn’t be at all surprised to see China Telecom’s 3G share pass Unicom’s by the middle of the year, making China Telecom the company to watch in 2012.

Bottom line: China Telecom’s imminent launch of the iPhone 4S on its 3G network could help to propel it past Unicom to become China’s second biggest 3G carrier by the middle of this year.

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