China Telecom to source 45 million 3G smartphones in 2012

Telecom Lead Team:

China Telecom, the only CDMA2000 mobile telecom carrier in China, will procure
45 million 3G smartphones, of which most will be for sale at $111-316, in 2012.

Telecom expects, its
wholly owned handset marketing subsidiary, to sell 80 million CDMA handsets,
including 45 million 3G smartphones, in the China market in 2012. In 2011, sold 34 million CDMA
handsets in more than 500 models, of which 16.6 million units of nearly 200
models were smartphones, according to China Telecom chairman Wang Xiao-chu.

China Telecom’s
CDMA supply chain consists of 410 companies of which 137 are handset vendors.
As China Telecom has hiked hardware specifications for its mid-level
smartphones priced at CNY1,500-2,000 to 1GHz processors and 4-inch touch
screens, China-based vendors such as Huawei Device, ZTE and Coolpad are
expected to be more competitive in price to obtain orders. However,
international vendors, including Samsung Electronics, Motorola Mobility and
HTC, are expected to gain the upper hand in mid- to high-end CDMA smartphones.

Telecom will continue to increase Wi-Fi hotspots and improve its differentiated
3G services, as the company expects the demand for its CDMA handsets to exceed
80 million units in 2012.

China Telecom finished 2011 with more than 129 million mobile subscribers and
the number of its upstream partners in the CDMA business increased by 140 from
2010. Covering 137 different brands, the sales of the company’s CDMA handsets
rose 40 percent in 2011 from the previous year.

Given major technological breakthroughs, the mobile Internet industry has
entered a new phase, and the combination of smartphones and various services
and applications will be the mainstay of the industry. China Telecom predicts
that the demand for its CDMA handsets will exceed 80 million units in 2012,
including 45 million 3G smartphones.

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