Unicom, China Telecom in iPhone race

China Telecom may beat Unicom in offering the iPhone 5 first in China, though it won't really matter since the product has already been available globally for more than two months.

PUBLISHED : Wednesday, 28 November, 2012, 11:15am
UPDATED : Wednesday, 28 November, 2012, 11:20am

More than two months after Apple (Nasdaq: AAPL) launched its latest iPhone, China Unicom (HK:0762; NYSE: CHU) and China Telecom (HK:0728; NYSE: CHA) are locked in a race to see who can offer the product first in China, in what looks more like a sad comedy of ineptitude than anything else. I usually save most of my criticism in the telecoms space for Unicom, the nation's second largest mobile carrier that has spent most of the last two years more focused on a series of non-stop management reshuffles rather than any attempts to do real business. But this time I also have to save some criticism for China Telecom, China's smallest mobile carrier, which also has looked equally inept in this latest iPhone launch.

Put simply, the iPhone 5 has now been available for two months in most of the world, meaning anyone in China who really wants one has probably already bought it on the gray market. What's more, buzz about this latest iPhone has been much more muted than previous launches, probably because the newest model is relatively similar to the previous iPhone 4 and 4S. All that means that the new iPhone is likely to generate little or no buzz when it finally makes its long-delayed launch in China, regardless of whether Unicom and China Telecom offers it first.

Still, that hasn't stopped both companies from making frantic preparations to try to be first to offer the iPhone 5. The latest media reports say China Telecom now hopes to launch the new iPhone around mid-December, with an initial price of 5,780 yuan, or about US$930, for people who buy on a service contract. The reports say China Telecom has been taking pre-orders for the iPhone since November 20. Meantime, previous reports have said that Unicom will offer the iPhone 5 for 100 yuan more than the China Telecom price, though Unicom has yet to say very much publicly about its iPhone plans.

Media reports have said all along that the big reason for the delay is China's massive bureaucracy, which requires approval from several government agencies before any new mobile phone can be offered on the nation's telecoms networks. In this case, the telecoms regulator is being cited as the biggest obstacle, and still has yet to approve the iPhone's use.

I've previously criticized Unicom, which has a longer relationship with Apple, for not being more proactive in getting the necessary approvals early so it could take part in the global launch. Unicom has sold iPhones in China for more than two years now, whereas China Telecom just began offering the iPhones in China early this year and thus has less experience with the product and working with Apple. But this lengthy delay by the telecoms regulator is starting to look increasingly strange, and I'm starting to wonder if perhaps the nation's biggest mobile carrier, China Mobile (HK:0941; NYSE: CHL), has perhaps played an obstructionist role to keep the new iPhone out of China as long as possible to undercut its rivals.

Regardless of the behind-the-scenes situation, the end result is the same. We won't be seeing China Telecom or Unicom offering the iPhone 5 until mid December at the earliest, and I wouldn't be surprised at all if it isn't available until 2013. While China Telecom seems to be a bit more aggressive and could ultimately offer the product first, at the end of the day this launch is already so late that it probably won't really matter if it beats out Unicom by a week or two. That could be good news for the few remaining Apple fans who haven't bought an iPhone yet, as I suspect we'll see few or no lines outside Apple stores when the iPhone 5 finally comes to China.

Bottom line: China Telecom may beat Unicom in offering the iPhone 5 first in China, though it won't really matter since the product has already been available globally for more than two months.