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Rumor: China Unicom to Reduce iPhone 5 Subsidy

Tencent Tech, 10/29/12

China Unicom (NYSE: CHU; 0762.HK; 600050.SH) will reportedly reduce calling subsidies and increase data limits on related calling plans for the iPhone 5 (16GB, 32GB, and 64GB models) compared to the previous iPhone 4S.

Wang Xiaochu, chairman of rival China Telecom (NYSE: CHA; 0728.HK), previously said that his company would maintain the same subsidies in H2 2012 as it did in H1 2012, but that this would not cover iPhone handset models. Terminal subsidies currently account for 23-24% of China Telecom's total revenues.

China Unicom and China Telecom are both preparing to launch the iPhone 5 in mid-December, although the two operators are still in discussions with Apple to establish an exact date. Apple has stated that the iPhone 5 will launch in mainland China in December.

Editor's Note: For more background on this topic, please see "Rumor: China Unicom to Lower WCDMA Smartphone Subsidy" MD 5/16/12 issue and "Apple to Release iPhone 5 in China in December" MD 10/26/12 issue.

Keywords: Wang Xiaochu China Telecom China Unicom subsidy iPhone handset smartphone wireless Apple 0728.HK 0762.HK 600050.SH CHA CHU

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