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China Unicom Offers $10 IPhone Package Amid Competition

A customer looks at an iPhone 4 at an Apple Inc. store in Beijing. Photographer: Feng Li/Getty Images
A customer looks at an iPhone 4 at an Apple Inc. store in Beijing. Photographer: Feng Li/Getty Images

May 25 (Bloomberg) -- China Unicom (Hong Kong) Ltd., China’s second-biggest mobile-phone operator, offered a cheaper iPhone package amid rising competition with larger rival China Mobile Ltd. in the world’s biggest wireless-phone market.

The Beijing-based company started offering a 66-yuan-a-month ($10) plan for the iPhone after previously setting the lowest-priced package at 96 yuan, President Lu Yimin said yesterday after meeting shareholders in Hong Kong.

Unicom beat China Mobile in 2009 to become the first carrier in the country to offer the iPhone. China Mobile is boosting investment in its network of wireless hotspots to attract users of Apple Inc.’s best-selling handset, while China Telecom Corp. is also in talks with the U.S. company to introduce the product.

“It is a trend” for rival carriers to offer services based on the iPhone device, Chief Executive Officer Chang Xiaobing said yesterday. “We don’t have a choice in this, and must be ready to face this environment.”

Demand for the iPhone will help Unicom exceed its target of adding 25 million customers for its 3G, or third-generation, services this year, Lu said.

China Mobile, whose 3G network technology isn’t supported by the iPhone, has 4 million subscribers using the Apple handset through the company’s network of Wi-Fi hotspots, Chairman Wang Jianzhou said last week. Wang said he expects Apple to develop an iPhone for the fourth-generation technology that the company hopes to commercialize next year.

Unicom fell 1.5 percent to HK$16.02 in Hong Kong trading yesterday. The stock has gained 44 percent this year, compared with a 10 percent decline for China Mobile, the world’s biggest carrier by users.

Service Contract

Unicom, the only carrier in China offering the iPhone with a service contract, added 1.82 million 3G subscribers for a total of 20.4 million in April, the company said this month. That lagged behind the 29.4 million 3G users for China Mobile, whose total customer base of 606.2 million is almost double Unicom’s 323.6 million.

China Telecom, the country’s biggest fixed-line carrier, is in talks with Apple to offer a CDMA version of the iPhone, Chairman Wang Xiaochu said last week.

China Mobile said last week it cut call rates by an average of at least 15 percent for some customers. Still, Unicom’s Chang said yesterday he sees “little room” for carriers to lower tariffs further.

Unicom plans to sell more short-term notes and bonds to finance the company’s expansion, Executive Director Tong Jilu said yesterday, without elaborating.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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