APPLE LINK TARGETED BY CHINA TELECOM

The next stage of development for China Telecom, the country's largest fixed-line operator, could well hinge on bringing Apple's much-coveted iPhone to its growing 3G subscriber base and buying the mobile network that it currently leases from its parent company.

Chairman and chief executive Wang Xiaochu (pictured) yesterday addressed those two strategic initiatives after the Beijing-based carrier's annual meeting in Hong Kong.

Wang confirmed that China Telecom was 'in touch' with Apple to discuss becoming the US-based company's next carrier-partner on the mainland after China Unicom.

The goal was to bring to the mainland the latest version of Apple's iPhone 4 that is based on the 3G standard called CDMA2000 1x EV-DO, which was released in February this year to subscribers of US carrier Verizon Wireless.

China Telecom supports that same 3G standard, while larger domestic rival Unicom's network is based on the more widely-adopted system called WCDMA.

'I cannot comment on the progress,' Wang said.

A China Telecom spokesman pointed out that the operator has signed a confidentiality agreement with Apple.

Domestic market leader China Mobile, the world's biggest wireless network operator with more than 600 million subscribers, has also been targeting an Apple partnership, despite operating a 3G network based on the mainland-backed TD-SCDMA standard.

Jane Wang, an analyst at market research firm Ovum, has predicted China Telecom's success in offering the CDMA2000 iPhone 4 on the mainland would 'develop a high-end mobile subscriber base' for the carrier and help it meet a target of 100 million total mobile users this year.

Hong Kong-listed China Telecom, the country's No 2 wireless network operator, yesterday reported 103.10 million total mobile subscribers as of last month, which included 17.84 million 3G network users.

It also recorded 67.82 million fixed-line broadband subscribers and 172.95 million local access lines in service.

Wang, the carrier's chairman, again pointed out that plans are proceeding to acquire the company's CDMA 2G and 3G networks from its mainland parent firm, China Telecommunications, by next year.

He had first disclosed this initiative in March, when he said the strategy would allow the company to save on rising lease fees. Last year, China Telecom paid its parent a CDMA network lease fee of 13.32 billion yuan (HK$15.9 billion), a 58.9 per cent increase from 2009.

The parent company bought the CDMA networks for about 110 billion yuan from Unicom in 2008.

Wang said China Telecom would consider the issue of yuan bonds in Hong Kong, adding that 'we'll need money to acquire our parent's CDMA network'.