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Thursday, October 07, 2010, 07:25 pm PT (10:25 pm ET)

China Telecom possibly in talks with Apple over CDMA iPhone

China's third-largest wireless operator may be in talks with Apple to offer a CDMA-version of the iPhone on its 3G network, according to an overseas report.

The South China Morning Post report cited a Deutsche Bank analyst note that claims China Unicom's exclusivity deal for the iPhone 4 would "likely come to an end early next year."

"Although China Telecom management in a recent lunch meeting refused to confirm whether the company would also begin selling a CDMA iPhone in China next quarter, our own channel checks suggest that the company has been in intensive talks with chipset supplier Qualcomm and Apple to ensure that this [development], indeed, happens," the paper quoted the note as saying.

Since China Telecom and Verizon use the same CDMA2000 EV-DO 3G standard, reports of a CDMA iPhone often point to both carriers. In a note to investors Thursday, J.P. Morgan analyst Mark Moskowitz wrote that he expects "the introduction of a CDMA iPhone first with Verizon in early 2011 and then China Telecom in early to mid-2011."

The Wall Street Journal reported earlier this week that Apple is indeed building a CDMA iPhone, then amended the story to specifically state that the phone would be coming to Verizon. Verizon President Lowell McAdam declined to "give any insight" on the Journal's report, instead saying that Apple would be the one to announce a partnership.

The Journal did not state whether the rumored CDMA iPhone would also be coming to China Telecom.

China Mobile, the world's largest wireless provider, hopes to get the iPhone as well, but it faces the obstacle of convincing Apple to cater to its proprietary 3G network. In March, China Mobile chief executive Wang Jianzhou called on Apple to include TD-SCDMA in the iPhone.

The state-owned company had hoped to avoid patent royalty fees from Nokia and Qualcomm by using a China-developed 3G standard. Although China Mobile has managed to court several manufacturers, including BlackBerry-maker Research in Motion, Nokia, Motorola and Samsung, it has struggled to attract subscribers for its 3G service.

Meanwhile, China Unicom is enjoying a steady influx of new 3G subscribers through sales of the iPhone 4, which officially arrived in China on Sept. 25. China Unicom revealed that it had received over 200,000 preorders in the first few days of availability and might not be able to fulfill preorders until late October.