It follows China Unicom in striking a deal to sell the popular iPhone in the world's largest mobile market.
Apple's share of China's mobile market slipped for a second straight quarter in October-December as it lost ground to cheaper local brands such as Huawei Technologies and ZTE .
China Telecom said it would increase marketing following the launch of the iPhone 4S, which should boost its long-term sustainable growth, but could squeeze short-term profitability.
The deal is expected to boost the U.S. technology giant's presence in China, where it is embroiled in a lawsuit with a local company over the iPad name and issues at Apple's suppliers' factories in China over wages and working conditions.
Analysts predicted last week that China Telecom would sell about 1.4 million iPhones this year if it could reach a deal with Apple by May, rising to 2-4 million new iPhone users in 2013.
China Telecom competes with China Unicom and China Mobile , which has also been aggressively negotiating with Apple to sell the iPhone in China.
China Mobile, the country's largest carrier, with more than 600 million subscribers, may not have matching technology in place commercially until late 2012 or 2013.
With the number of mobile subscribers set to top 1 billion in China this year, there is cut-throat competition for sales.
Chinese firms are gradually shifting up towards the higher end of the market, unveiling more feature-packed smartphones.
The total number of mobile subscribers in China increased 1.2 percent to 987.58 million in January, data from the country's three telecom operators showed.