China Telecom in Talks to Offer BlackBerry

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The companies have "started preliminary contacts" over offering the device, which could potentially use China Telecom's 3G network, a spokesman for the carrier said.

The companies expect to start sales of the device in the fourth quarter, said Zhang Jun, an analyst at research house Wedge MKI.

China's three carriers -- China Mobile, China Telecom and China Unicom -- are all expanding their 3G networks, which currently offer limited coverage and have drawn few subscribers. Each carrier has sought to offer stylish handsets for its network to attract and retain users.

But the BlackBerry may not strongly attract users. Data services are not yet very popular in China, where voice and text messaging remain the most common activities on mobile phones, Zhang said.

China Mobile has offered BlackBerry service for three years, but no BlackBerry handsets for individual consumers, said Mark Natkin, managing director of Marbridge Consulting in Beijing.

China Mobile also undercut the BlackBerry offering by launching its own, cheaper service around the same time to deliver e-mail directly to other handsets, said Natkin.

China Telecom has far fewer mobile subscribers than China Mobile, the country's and the world's largest carrier, but it may be more accommodating toward RIM than its competitor, he said.

China Mobile reported having over 488 million mobile subscribers last month, compared to almost 37 million for China Telecom.

The iPhone is better known than the BlackBerry in China. IPhones smuggled into the country or purchased abroad have proven popular with fashion-conscious urban users. There are already 1 million iPhones in China, consultancy Ovum estimates.

Apple is in talks with China Unicom about offering the iPhone and has said it hopes to start sales in China in the next year.

A RIM spokesman declined to comment.