A year on, China Mobile, Apple still in iPhone talks

BANGKOK – The world’s largest mobile phone service provider is still in talks with Apple about bringing the iPhone to China, nearly a year after formally revealing such discussions.

“Steve Jobs and I hope the iPhone will enter China as soon as possible,” said Wang Jianzhou, CEO of China Mobile, on the sidelines of the ITU Telecom Asia 2008 exhibition in Bangkok Tuesday. “We are discussing this issue but we do not have an agreement.”

It’s not clear what’s holding back an agreement. Wang declined further comment, citing a non-disclosure agreement with Apple. Last November, Wang said he didn’t like the revenue sharing model that went along with the iPhone.

China Mobile would be a good catch for Apple. The Chinese company boasted over 420 million subscribers at the end of July, making it the largest mobile service provider in the world.

China Mobile is also a member of Google’s Open Handset Alliance, a consortium of technology and service companies that will develop products based on Google’s Android mobile phone platform, which will be a competitor for the iPhone. The first Android-based phones are expected on world markets within the next few months.

But Apple has other choices in China, and may opt to work with a smaller Chinese mobile service operator willing to provide better terms in return for the news coverage and subscribers that come along with iPhone sales.

For now, Chinese users who want an iPhone have to smuggle them into the country and break the security meant to tie them to a specific service provider. Analysts estimate that there are already over 800,000 iPhones in use throughout China.

Also in the interview, Wang said China Mobile said it plans to soon start testing a mobile broadband system based on TD-LTE (Time Division Duplex Long Term Evolution) technology, but a lack of chipsets stands in the way. LTE technology is considered the next generation of wireless Internet technology.

TD-LTE uses China’s TD-SCDMA (Time Division Synchronous Code Division Multiple Access) technology, which is the basis for China Mobile’s 3G network (third generation mobile telecommunications). That 3G network is heading towards a commercial launch, likely late this year. China Mobile is working with the Vodafone Group and Verizon Wireless to test a combination of TD-LTE and the LTE-FDD (the Frequency Division Duplex version of LTE) technology Vodafone and Verizon hope to roll out.

The three companies announced a plan to work together in February. One reason they chose to combine efforts was to make both technologies less expensive by promoting their combination in chipsets and other components. Mobile phone chip maker Qualcomm and other companies are working on chipsets with TD-LTE and LTE-FDD on board, Wang said.

The ability of chipsets to support both technologies will also allow greater roaming across countries using the different technologies in their networks. A Verizon subscriber, for example, wouldn’t have to switch handsets if they visited China, if chipsets carried both technologies.

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