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China Mobile Boosts Subsidies as Carrier Awaits IPhone Deal

Dec. 18 (Bloomberg) -- China Mobile Ltd., the world’s largest phone company, will spend more on subsidies next year as it tries to boost smartphone sales by as much as 42 percent and lure customers to its new high-speed service.

China Mobile plans to sell as many as 220 million smartphones next year, compared with 155 million this year, Chairman Xi Guohua said today in Guangzhou, according to remarks posted on the carrier’s official microblog account. The carrier has yet to reach agreement with Apple Inc. to offer the iPhone, the official China Daily newspaper reported today, citing Xi.

Handset subsidies will expand next year from the 27 billion yuan ($4.4 billion) spent this year, Xi said, as the carrier seeks to push more of its 759 million subscribers to higher-priced voice and data plans on the faster network. China Mobile signed agreements with handset manufacturers including Lenovo Group Ltd. and Xiaomi Corp. for devices that operate on the fourth-generation network, according to the official Xinhua News Agency.

“This 4G service creates a new future,” Chief Executive Officer Li Yue told the developers’ conference in Guangzhou. “It will promote the popularization of a variety of application innovations.”

China Mobile received regulatory approval on Dec. 4 to start commercial service on the world’s largest 4G network. The service will be marketed under the name “And,” Li said.

Samsung, Sony

China Mobile hopes to have an agreement with Apple “soon,” the China Daily quoted Xi as saying. Kitty Potter, a Beijing-based Apple spokeswoman, declined to comment on the status of talks with the carrier.

Apple is close to agreeing to a distribution deal with China Mobile, a person with knowledge of the matter said in September. The carrier said in 2011 that Apple, which doesn’t make a handset compatible with China Mobile’s 3G network, agreed to make an iPhone for its customers once it shifted to 4G.

China Mobile handset sales next year will include 100 million 4G TD-LTE devices, Xi told the conference.

The carrier last week began offering smartphone discounts of as much as $919 on popular handsets such as Samsung Electronics Co.’s Galaxy Note II to lure users. In Beijing, China Mobile currently offers 4G smartphones from Samsung, Sony Corp., HTC Corp. and domestic vendors including ZTE Corp., Huawei Technologies Co., and the Coolpad brand of China Wireless Technologies Ltd.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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