New Express, 8/21/08
Since it launched its first round of CDMA handset bidding last month, China Telecom (NYSE: CHA; 0728.HK) has quietly cooperated with 27 handset manufacturers over handset customizations. The cooperations cover 70 CDMA handset models, including: 8 from ZTE (0763.HK; 000063.SZ), 6 from Samsung, 6 from Huawei, 5 from Hisense (600060.SH), 5 from Yulong, 4 from LG, 2 from Nokia, 5 from Tianyu (K-touch), 3 from Gionee, 3 from Huaqi Information Digital Technology (Aigo), and a total of 4 other models between the 3 manufacturers OKwap, KingSun Technology, and Jepson Digital Technology. Of the more than 20 handset manufacturers that produced CDMA handsets for China Unicom's (NYSE: CHU; 0762.HK; 600050.SH) handset procurement subsidiary, Unicom Huasheng, only CECT, HTW, and SK, were not included in China Telecom's procurement list.
Several models from OKwap, Bird (600130.SH), Huaqi have WiFi functionality and 1 model from Jepson is a CMMB handset.
Previously, Tianyu, Gionee, OKwap, KingSun, and Jepson had backgrounds in the production of counterfeit handsets.
A China Telecom insider also revealed that China Telecom does not approve of previous CDMA promotional measures used by Unicom, such as subsiding calling fees and giving away free handsets, as such tactics are disliked by enterprise clients. In the future, China Telecom will likely customize some models to suit different market segments, however such models would compete on the market on their merits, rather than being given away for free.
Editor's Note: For more background on Telecom's CDMA bidding, please See "China Wireless Expects 60% Revenues from China Telecom", MD 8/18/08 issue, and "China Telecom Invites Bids for 10 mln CDMA Handsets", MD 7/16/08 issue.