China Telecom Co., Ltd. (0728 HK) is going to sell CDMA version iPhone of Apple Inc. AAPL in November 2011.

In order to bring in Apple's mobile phone successfully in the fourth quarter of 2011, China Telecom is making the terminal allowance policy. Apple does not negotiate with Chinese agents if it can not enjoy the best allowance policy from them.

As an agent of iPhone, China Unicom (Hong Kong) Ltd. CHU(sehk:0762)(shse:600050) has absorbed large amount of high-end 3G users. However, it saw an increase of deficiency in 2010. China Unicom's sales expenditure for communications products was CNY 10.69 billion over 2010, up 297.5% year on year. However, the sales deficiency totaled CNY 3.23 billion contemporarily, and in terms of 3G terminals, the sales deficiency was CNY 3.17 billion. Net profit of China Unicom slipped 60% over 2010.

If China Telecom gets the agency right of iPhone, it may not impact China Unicom so much, because China Telecom will keep the level of terminal allowance same with China Unicom's, an insider say.

Source:c114