China Telecom to buy 4m 3G phones

China Telecom to buy 4m 3G phones

China Telecom yesterday placed a 4-million 3G handset order with dozens of domestic mobile phone makers, the biggest such order ever in China, as the country's largest fixed-line phone operator steps up its efforts to build up its 3G user bases.

The multi-billion yuan order, which includes 63 different customized models, will greatly expand China Telecom's 3G handset portfolios and is expected to help it attract more users.

Tianyi Telecom Terminal Co, China Telecom's terminal unit, will place the order with 31 mobile phone makers, majority of whom are domestic vendors, China Telecom said.

The 4-million customized handsets China Telecom ordered, bigger than its original plan of 3.6 million, are mostly priced in the 1,000 yuan range and some are priced as low as 500 yuan per handset, the statement said, a pricing that analysts say will make it more competitive and affordable to more customers.

The lack of 3G-capable handsets has been hindering the growth of the 3G services in the country.

China Telecom's move comes as China Mobile, its larger competitor, is also stepping up efforts to make more 3G handsets available in the market.

"The problem we have is not the 3G network, but rather a lack of cellphones that can support it," said Wang Jianzhou, chairman, China Mobile, at a news conference in Taiwan over the weekend.

Wang said China Mobile would work with smartphone maker HTC to launch at least one model, which will be called the "Ophone", in China this year and at least five models in 2010.

Wang said he expects the number of 3G-capable phone models that support its TD-SCDMA standard will quadruple to over 200 by the middle of 2010.

China Telecom, which operates CDMA standard 3G services, posted a net gain of 2.45 million mobile subscribers in July, the biggest increase so far this year and the seventh consecutive positive growth month.

China Mobile, the country's largest telecom operator, said its subscriber numbers fell to 466,000 in July over June.

China Unicom, the second largest telecom operator, said mobile subscribers increased by 680,000 in July, down 182,000 from the previous month.

China Telecom has sold nearly 100,000 units of 3G phones in the first five months of this year, the largest shipment among the three telecom operators and accounting for 55 percent of all the 3G phones sold in the country at the same time, according to Sino Market Research.

China Telecom "outperforms the market expectation in terms of its CDMA subscriber growth", Central China Securities said in a note recently