This is good news for LG. Because of poor distribution in China, LG is something like No.6 or No.7 in market share, well behind its global No.3 spot. So cutting a deal with the operators will give it broader reach -- likely at the cost of slimmer margins since operators are notoriously cheap.

LG is also supplying China Mobile with TD-SCDMA phones, but that market is still a crap shoot. So this deal puts LG in the game for mainstream 3G phones in China, namely those based on CDMA and W-CDMA. LG believes the overall handset market in China will more than double to 30mn units in 2010 from 14mn this year.

Here's a story from Reuters with more background on the China Telecom and China Unicom deals.