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Rumor: China Telecom iPhone Talks Stalled

Sina Tech, 4/12/11

An industry source recently told Taiwanese media that talks between Apple and China Telecom (NYSE: CHA; 0728.HK) have run into obstacles recently owing to disagreements over the terms of an iPhone procurement deal. Apple, following the terms of its deal with China Telecom rival China Unicom (NYSE: CHU; 0762.HK; 600050.SH), suggested a bulk sales purchase deal under which China Telecom would make a one-time bulk purchase of iPhone 4 handsets, while China Telecom is reportedly not in any hurry to close a deal this year. With talks stuck, chances for launch of a CDMA iPhone in China in Q2 appear slim.

According to an industry analyst at an international company, China Telecom's main goal is to break even on its mobile business this year, after which it will purchase CDMA network assets from its parent company. If the operator were to get ahead of itself on handset subsidies, the analyst said, it could fall short of its goals.

A spokesperson for China Telecom declined to comment on the rumor, but said that the operator had signed confidentiality agreements with Apple under which it could not discuss details of the talks.

Keywords: China Telecom iPhone handset procurement wireless Apple CDMA 0728.HK CHA CHU smartphone subsidy timetable

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