China Telecom Corp Ltd, the smallest of the country's three wireless carriers, has contacted Apple Inc to introduce the popular iPhone based on CDMA (code division multiple access) technology, Chairman Wang Xiaochu said on Friday.

Larger rival China Unicom is the only operator in China, which has 886 million mobile phone users, to offer the iPhone so far. However, some analysts say China Telecom could be next after an exclusive agreement with Unicom expires this year.

We're not denying that we're in touch with iPhone (Apple), but I cannot comment on the progress, Wang told reporters after a shareholders' meeting.

Shareholders also approved an up to 90 billion yuan ($14 billion) bond issue, including 60 billion yuan overseas and the remainder domestically.

Some of the proceeds would be used to develop its CDMA network, executives said.

From what we see now, we'll need money to acquire our parent's CDMA network. But other than that, we won't need to issue a huge amount of bonds, Wang said.

Wang also said China Telecom would consider Hong Kong as a first priority for issuing overseas bonds, although it had no immediate plan for a yuan bond in the Chinese territory.

China Telecom, a relative newcomer to China's mobile market, operates the country's largest fixed-line network and is aggressively promoting broadband over that channel.

China Telecom had 103.10 million mobile phone users as of April, including 17.84 million 3G subscribers.

China Telecom shares, which have gained more than 10 percent this year, were up 1.8 percent in Friday afternoon trading, outperforming the Hang Seng Index's 0.06 percent gain.

(Editing by Chris Lewis)

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