China Telecom (NYSE: CHA; 0728.HK) will reduce its terminal subsidies in Q4 2011 to pave the way for the CDMA2000 EV-DO iPhone, according to an industry source. In China Telecom's negotiations with Apple, Apple stipulated that there should be a single, standard subsidy offered nationwide on the iPhone, and that it should be the highest subsidy China Telecom offers on any handset.
The size and scope of China Telecom terminal subsidies currently vary from province to province. For example, Beijing Telecom users can receive between RMB 840 and RMB 4,800 in calling credit when purchasing designated 3G handsets with a two-year contract. Shandong Telecom users, meanwhile, receive RMB 1,000 in calling credit when they purchase RMB 3,000-priced handset, some of which are CDMA 3G handsets.