Subsidies offered for smartphone makers

China Telecom Corp Ltd, the third-biggest mobile network operator in China, said on Thursday that it will offer 16 billion yuan ($2.56 billion) in subsidies to smartphone producers, part of an attempt to add 120 million new subscribers this year.

President and Chief Operating Officer Yang Jie told a conference in Beijing that 12.4 billion yuan will go to devices that are tailor-made for the company's networks. Up to 600 million yuan will be offered as incentives to encourage manufacturers to produce devices priced less than 700 yuan.

Yang said China Telecom aims to add 100 million fourth-generation network users this year and sell 100 million smartphones.

"The goals are not easy ones. We hope that we can meet our targets in cooperation with smartphone makers and distributors," he said.

China Telecom's subsidy package is the most generous of the three carriers in the nation. China Mobile Ltd is the biggest telecom operator by users and China United Telecommunications Corp is the second-largest.

Consultancy International Data Corp figures show that the three firms' subsidies for device makers fell 20 percent last year. Total subsidies of the three will be down about 7 percent this year.

"Compared with the 18 billion yuan offered by China Mobile and the 9.5 billion yuan offered by China United Telecommunications, the subsidies offered by China Telecom are high, given that its users only account for 15 percent of the market," said James Yan, a senior analyst at IDC.