October 29, 2012 / 4:30 AM / in 5 years

CORRECTED-UPDATE 1-China Telecom Q3 profit falls for third consecutive quarter

(Corrects headline to show third quarter of profit decline, not loss)

* Q3 net profit 3.8 bln yuan vs f‘cast 3.8 bln yuan

* Handset subsidies weigh on bottomline after iPhone

* Shares up 2.2 percent before announcement

HONG KONG, Oct 29 (Reuters) - China Telecom Corp Ltd , the smallest of the country’s three mobile carriers, logged its third consecutive quarter of profit decline due to higher spending on handset subsidies after it started selling Apple Inc’s iPhone.

Net profit fell 7 percent to 3.8 billion yuan ($603 million) in July-September, according to Reuters calculations based on nine-month earnings data released on Monday. That compares with an average estimate of 3.8 billion yuan in a Reuters poll of six analysts.

With data more lucrative than call services, Chinese wireless carriers have been offering handset subsidies to entice users willing to pay more to surf the Internet, download data and play online games on their smartphone.

China Telecom signed a deal with Apple in February to sell iPhones and sharply increased handset subsidies.

Rival China Unicom (Hong Kong) Ltd has cut back on handset subsidies after splurging in 2009 when it began to carry iPhones.

China Mobile Ltd does not have a contract with Apple to sell iPhones.

China Telecom’s third-quarter earnings decline trails behind China Mobile’s 1.3 percent increase and China Unicom’s 27 percent gain.

For the first nine months, China Telecom reported a net profit of 12.6 billion yuan, down 8 percent from a year earlier. (Reporting by Lee Chyen Yee; Editing by Ryan Woo)

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