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China Telecom to bring in their own CDMA-based iPhone

The smartphone market in China has been expanding at a rapid pace as both Google’s Android operating system and Apple’s iPhone vie for majority stakes in the Chinese market.

Today, the iPhone is available from China Unicorn, the largest of the country's three wireless carriers, but talks have began in earnest between China Telecom Corp Ltd, the smallest of the three players, and Apple Inc to introduce iPhones based on CDMA technology, according to news reports.

China Unicorn currently still has an exclusive agreement with Apple. However it is bound to expire this 2011, so China Telecom wasted no time in negotiating with Apple to offer the phone when it becomes available.

China Telecom’s chairman, Wang Xiaochu, speaking to reporters after a shareholders' meeting, confirmed that talks were happening, but he wouldn’t elaborate on the details.
He said, "We're not denying that we're in touch with Apple, but I cannot comment on the progress."

During the meeting, shareholders approved a bond issue of about US$14 billion, with a portion of that allotted for the development of the Chinese CDMA iPhone.

Experts agree that bringing the iPhone to China Telecom would not take so much work since Apple already has the CDMA version of the iPhone 4 just like Verizon’s iPhone which also uses CDMA radio technology. "From what we see now, we will need money to acquire our parent company's CDMA network. But other than that, we won't need to issue a huge amount of bonds," Wang said to the press. He also said China Telecom would consider Hong Kong as top priority if issuing overseas bonds.

Industry sources say Apple’s iPhone expansion in China might be part of the reason why the company is not introducing the iPhone 5 this summer and most likely be releasing a more incremental upgrade called the iPhone 4S, rather than a fully new version.

China Telecom is a relative newcomer to China's mobile market. The company operates the country's biggest fixed-line network and is aggressively promoting broadband internet access over that channel.

They boast of about 103 million mobile subscribers, but only about 17 million are 3G subscribers, according to news reports. Nevertheless that is still a large market for possible iPhone users and most industry insiders believe Apple will also talk with China Mobile, the other carrier in the country. Statistics say the number of 3G customers in China is expected to break 62 million, with about 27 million of them carried by China Mobile.