China Unicom Offers Free iPhone 4S With Contract

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China Unicom is offering a free iPhone 4S to customers who sign a multiyear contract with tariffs as low as 286 yuan ($45) per month, reports Bloomberg.

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.

Despite many rumors that China Mobile would begin carrying the iPhone, China Unicom is the only one of the nations three carriers that currently sells the device. While this clearly offers the carrier an advantage, its subsidy costs have already ballooned almost fourfold.

"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."

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