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October 15, 2009

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Deal ties in iPhone 3G users

APPLE'S iPhone 3G will make its debut on the Chinese mainland market on October 30 as scheduled and aspiring users will have to sign a two-year contract with China Unicom, the country's No. 2 telco said yesterday.

Getting users to sign a contract is one way for China Unicom to lure subscribers to its network and is a competitive edge in the battle with its bigger rival, China Mobile, in the keenly-fought mobile phone market, analysts said.

"The iPhone is expected to help China Unicom grab market share in the high-end segment from rivals, especially China Mobile," said Wu Wenzhao, a telecommunications analyst at Analysys International, a Beijing-based IT consulting firm.

The three models set to debut are the older iPhone 3G 8 gigabytes, and the 16GB and 32GB versions of the latest iPhone 3GS. Users can expect to pay between 5,999 yuan (US$882) and 7,999 yuan, which include the handset price and telecommunications fee package for 24 months, China Unicom said in a statement.

In the gray market, a smuggled iPhone 3GS 16GB costs 5,500 yuan.

Under China Unicom's fee package, the same model costs 3,999 yuan but users have to pay an extra 3,000 yuan as an advance deposit to cover the two-year contract.

It's estimated that more than 10 million users own smuggled iPhones, mainly the older 3G and 2G models, in the country and most of them subscribe to China Mobile, the country's leading telco, said OVUM, a United Kingdom-based research firm.

China Unicom officially started 3G, or third generation, commercial services two weeks ago, adopting the WCDMA (wideband code division multiple access) network, the most commercially-mature 3G technology worldwide.

Also yesterday, the telco said it would invest 2 billion yuan in Shanghai by the end of this year to upgrade its broadband network.

By the year end, all local China Unicom users will be able to enjoy a broadband network speed of 8 megabits per second, fourfold the previous pace, according to the telco's Shanghai branch.

In January, China's industry regulator issued 3G licenses to China Mobile, China Unicom and China Telecom.

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