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Edition: U.S. Article Comments (0) Technology Exclusive: Apple chief patent lawyer to leave Doubt rising about tech stock values Cisco could cut up to 10,000 jobs: report Split Research in Motion in two: analyst Target to sell new electronic reader China says piracy problem not "extremely serious" Amazon seeks ballot measure to undo California tax EBay may be liable on trademark abuse: court MediaFile: HP's TouchPad tablet - the reviews Video: Nintendo's Mario gets refresh Follow Reuters Facebook Twitter RSS YouTube Read Obama warns on debt, deal elusive after talks | 1:17am EDT California woman accused of slicing off husband's penis 12 Jul 2011 Amazon seeks ballot measure to undo California tax 12 Jul 2011 Singer Jewel gives birth to a boy | 12 Jul 2011 Democrats win early victory in Wisconsin recall primary 12:54am EDT Discussed 115 Obama, lawmakers meet for 75 minutes on debt impasse 96 WRAPUP 1-Taxes still a stumbling block in U.S. debt talks 93 Obama and lawmakers regroup to seek debt deal Watched A Tokyo-Paris flight in under three hours on the horizon Fri, Jun 24 2011 Hefner's revenge; Ryan Reynolds stops traffic Fri, Jun 17 2011 Schwarzenegger to start film, Jewel has baby 8:39am EDT Exclusive: China Telecom plans iPhone launch year-end Tweet Share this Email Print Related News Special report: New Mexican TV probe hits embattled Slim Tue, Jul 12 2011 Apple chief patent lawyer leaving: sources Tue, Jul 12 2011 EBay buys Zong as mobile payments gain traction Thu, Jul 7 2011 Struggling LG slashes phone sales targets Thu, Jul 7 2011 Samsung quarterly profit falls as weak LCDs overshadow mobiles Thu, Jul 7 2011 Analysis & Opinion Tech wrap: Verizon ditches unlimited data plan Focusing on the fundamentals Related Topics Technology » Media » Steve Jobs » An iPhone is seen at the Apple store in New York May 23, 2011. Credit: Reuters/Shannon Stapleton By Lee Chyen Yee and Huang Yuntao HONG KONG | Wed Jul 13, 2011 1:56am EDT HONG KONG (Reuters) - China Telecom Corp Ltd plans to offer its 106 million subscribers the Apple Inc iPhone by the end of 2011, sources said on Wednesday, which would make it the second operator to do so in the world's largest mobile phone market. The move would help China Telecom, the smallest of the country's three telecommunications operators, cement more high-end 3G users in a competitive market in which handset subsidies offered by carriers are squeezing margins. China Telecom operates the country's largest fixed-line network and is a relative newcomer to the mobile market. "The reason telecom operators are fighting for the iPhone business is because everybody is trying to grab as many 3G users as possible," said Jane Wang, an analyst at UK-based research firm Ovum. "The only way to keep costs down is to build up such a user base." China Telecom's shares, which have risen by about a fifth this year, extended earlier gains after Reuters exclusively reported the plan, rising as much as 5.5 percent to an intraday high of HK$4.95 and outperforming the Hang Seng Index's 1 percent gain. Separately on Wednesday, China Telecom said in a statement that its president and chief operating officer, Shang Bing, had resigned to become deputy minister of the Ministry of Industry and Information Technology. China has 896 million mobile phone users -- bigger than the entire population of Europe. Its three telecommunications operators are China Mobile Ltd, China Unicom and China Telecom. So far, China Unicom is the only operator to offer the iPhone after signing a three-year agreement with Apple in 2009. Its deal with Apple is not based on a revenue-sharing scheme, unlike some operators in other countries. For example, in the United States, Apple has a revenue-sharing agreement with AT&T Inc on iPhone sales. "Unicom is selling iPhones, but there was no particular boost to their earnings from that," said Patrick Yiu, director at CASH Asset Management. "Even if China Telecom gets the iPhone deal, it will still depend on whether their system can support it and on the details of the contract." In May, China Telecom's chairman, Wang Xiaochu, told a news conference that the carrier had contacted Apple to launch the iPhone based on CDMA (code division multiple access) technology. "It's expected to happen this year. China Telecom already has the required technology and it all hinges on the content of the agreement. As we all know, it's not easy to negotiate with Apple," a source close to the company, speaking on condition of anonymity, told Reuters. China Telecom is expected to introduce the iPhone in November, said another source, declining to be identified because he was not authorized to speak to the media. Officials with China Telecom declined to comment, while Apple officials were not immediately available for comment. In June, a media report said bigger rival China Mobile could offer iPhones from September, although analysts said it was unlikely that Apple would support the carrier's TD-SCDMA (time division synchronous code division multiple access) technology. A more likely scenario was for Apple to support China Mobile's 4G LTE (long-term evolution) technology, which would only be available either in late 2012 or 2013, they said. If that is the case, China Telecom would be next in line to offer iPhones. "Widening its user base by developing 3G is China Telecom's top priority," said Kevin Tian at Analysys International. "However, its costs might be higher than China Unicom's and if it brings in the iPhone, its sales and marketing expenditure will not be low." ($1 = 7.795 Hong Kong dollars) (Editing by Chris Lewis and Matt Driskill) Technology Media Steve Jobs Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. 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