China Unicom Offers Free IPhone 4S for Users Who Sign Multiyear Contracts

Posted: 07/01/2012 in Technology
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China United Network Communications Group (CHTZ), the nation’s second-largest wireless carrier, will give users an Apple Inc. (AAPL) iPhone 4S if they sign multiyear service contracts costing as little as 286 yuan ($45) a month.

The promotion starting Jan. 13 offers a 32-gigabyte model with a three-year plan, while a commitment to two years for a monthly fee of 386 yuan allows users to get the 16-gigabyte model, the company known as China Unicom said in a statement on its website yesterday.

China Unicom, the only one of the nation’s three carriers offering the iPhone with a service contract, is using the handset to woo high-end subscribers who play games and watch online videos using their phones. The user growth comes at a price as Unicom’s 3G subsidy costs in the first half of 2011 ballooned almost fourfold, driven by support for the iPhone.

“After subsidizing the iPhone, the operator will have less money for subsidizing other smartphone users that could be more profitable,” Steven Liu, a Hong Kong-based analyst with Standard Chartered Bank, said in an e-mail today. He rates (762) the shares “underperform” and said the company’s subscriber growth will “slow down despite iPhone.”

China Unicom (762) (Hong Kong) Ltd., the company’s publicly traded (762) unit, fell 1.3 percent to HK$16.42 at the close in Hong Kong, its largest decline since Dec. 15. That compared with a 1.2 percent drop in the city’s benchmark Hang Seng Index.

Sophia Tso, a Hong Kong-based spokeswoman for China Unicom, said she couldn’t immediately comment on what the iPhone 4S pricing plan would mean for its subsidy costs.


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