China Telecom to Start Offering IPhone 4S in March

By Bloomberg News - Feb 21, 2012 8:27 AM GMT+0700

China Telecom Corp. (728) will offer Apple Inc. (AAPL)’s iPhone 4S starting March 9, making it the nation’s second mobile-phone company to sell the device.

Users who commit to a two-year contract can get a free 16- gigabyte handset with a service plan costing 389 yuan ($62) a month, the state-owned parent of China Telecom, the nation’s third-largest wireless carrier, said in a statement today. A three-year plan cuts the monthly minimum to 289 yuan, it said.

For Apple, adding China Telecom as a distributor in the world’s largest mobile-phone market almost doubles the number of potential iPhone buyers who can get a subsidized handset from a service operator. China Unicom (Hong Kong) Ltd. (762), the nation’s first carrier to offer the iPhone with a service contract in October 2009, began selling the 4S in January.

“IPhone 4S has been an incredible hit with customers around the world,” Carolyn Wu, a Beijing-based spokeswoman for Apple, said by telephone. We “can’t wait to get it into the hands of even more customers in China,” she said.

China Telecom will make an “appropriate increase in marketing initiatives” in connection with iPhone sales, the company said in a filing to the Hong Kong stock exchange today. Expenses to market the phone will mean “short-term pressure on its profitability,” it said, without providing figures.

China Unicom had 43 million subscribers to its high-speed third-generation network at the end of January. China Telecom had 38.7 million 3G subscribers at the end of last month.

China Demand

Cupertino, California-based Apple had underestimated the “staggering” demand for the iPhone 4S when it started sales in China, Chief Executive Officer Tim Cook said last month.

“We thought we were betting bold,” Cook said on a Jan. 24 conference call. “We didn’t bet high enough.”

Apple’s oldest store in China was pelted with eggs from a crowd of customers on Jan. 13 when the shop, in Beijing’s Sanlitun district, failed to open on the first day of sales for the iPhone 4S. After police sealed off the area to remove more than 500 people, Apple said it would suspend sales of iPhones at all its stores.

Currently, iPhones are available in China through Apple’s online store, resellers and China Unicom.

China Mobile Ltd. (941), the world’s largest carrier by customers, is now the only Chinese wireless company not offering the iPhone with a service contract. The iPhone doesn’t support its third-generation network, based on a China-developed technology.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net