Blog Post

China Unicom Signs Three-Year iPhone Deal

Hong Kong-based telco China Unicom has confirmed it will distribute Apple’s iPhone across China in a three-year deal starting in Q4 this year. Reports have suggested that a deal was signed weeks ago, but the company made it official in its H109 interim results released Friday.

News emerged two weeks ago that the Unicom has bought some five million 8Gb and 16Gb iPhone handsets for $1.46 billion — suggesting Unicom will buy the phones and sell them on a wholesale basis, rather then share revenue with Apple (NSDQ: AAPL) as operators in others countries do. The company has confirmed the relationship will be on a wholesale basis, according to WSJ.com.

State-owned China Unicom isn’t the country’s biggest mobile operator: with 140 million subscribers — it added seven million in the first half the year — Unicom still lags behind China Mobile which has 415 million. But Unicom will launch a 3G network “within the year” using the WCDMA standard, making it compatible with the iPhone’s data roaming. WSJ.com reports that the Chinese iPhone will be stripped of its wifi connectivity — at least initially — to comply with strict state telecommunications rules.

Unicom’s first half revenue fell 6.3 percent to 76.32 billion yuan ($11.1 billion) while profits dropped 42 percent to ($969 million), due to falls in fixed line income.