CHINA Telecom, which is in the process of acquiring China Unicom's CDMA (code division multiple access) business, has bought 5 million CDMA phones and is expected to sell them at 200 yuan (US$29) as early as next month.

China Telecom, the country's fixed-line phone operator, ordered the phones from Samsung, ZTE, Motorola and Huawei, according to industry sources. China Telecom declined to comment.

"The shortage of phone variety is a bottleneck for CDMA and it's a necessary step for China Telecom to enter the mobile phone war," said Sandy Shen, a Shanghai-based analyst at Gartner.

In China's telecom industry revamp, China Telecom will acquire China Unicom's CDMA business and China Unicom's GSM (global system for mobile communications) will merge with China Netcom, the country's No. 2 fixed-line phone operator.

China's CDMA user base is about 42 million, less than 10 percent of the total mobile phone user base.

In the United States, the CDMA user base accounted for 52 percent of the total mobile phone market by the end of 2007, according to Gartner, a US-based IT consulting firm.

Apart from phones, China Telecome "has to launch value-added and mobile-fixed-convergence services to attract more users to compete with strong rivals China Mobile and new China Unicom," Shen said.

ZTE and Huawei have produced low-cost phones for overseas carriers in developing countries, the firms said during previous interviews.

Price is an effective weapon as China Mobile added many users through the entry-level phones.

Source:shanghaidaily