Customers who buy 10 iPhone 4S sets together and register for a plan at the same time will be given another iPhone.

A China Telecom spokesman said the promotion was aimed at corporate clients who are providing members of their staffs with cutting-edge communication tools.

The program is also being seen as an effort to quickly boost profits following disappointing earnings in the first three months of the year.

Subsidizing iPhone sales dampened first-quarter earnings even though the telecom giant only started selling the devices in March.

China Telecom's total profit declined 6.5 percent in the first quarter from a year ago. It added only 7.26 million 3G subscribers during the period, down by 7.6 percent on 2011's fourth quarter.

China Unicom (0762), which was the first telco to secure iPhone selling rights in the mainland, recorded a 82.60-percent surge in smartphone subsidies last year from 2010.

Meanwhile, handset maker TCL Communication Technology (2618) said it sold 367,163 smartphones in April - 10 percent more than in March.

Two new TCL smartphone models that were selected by China Telecom and China Unicom respectively were launched last month.

Also on the high-tech front, China's biggest personal computer maker, Lenovo Group (0992), is setting up a new research center and a plant in Wuhan, Hubei, to make smartphones and tablet computers.

The company will invest 5 billion yuan (HK$6.2 billion) in the plant, which is expected to be in operation by October next year. The aim is for annual sales of 10 billion yuan by 2014.

Shares of China Telecom fell 2.67 percent to HK$4.01 yesterday, while TCL slipped 1.28 percent to HK$3.08.