China Unicom warned that from December 1 users of the iPhone service bundle who break the service contracts would be penalized. A new contract on iPhone services was being used, stating that if users’ iPhones are not used with the China Unicom numbers, severe penalties would be imposed. If someone is found to be using an iPhone with another operator’s SIM card, the user’s number and mobile phone will be locked and a penalty will be imposed. If the user doesn’t re-activate the number and iPhone within 90 days, the penalty will be taken from the user’s account, and the profile and account will be deleted. Xiang Ligang, a telecom expert, said the new regulation has two purposes: mainly to curb speculative reselling of iPhones and partly to beat back China Mobile in the domestic market. China Unicom said that some people signed bundle service contracts, which include iPhones and related 3G services, but later resold the mobile phones and the services at a high price – even higher than the total value of the service bundle, which disturbs the market order. Xiang said that China Unicom’s iPhone 4 service bundle includes an iPhone 4 and a CNY5,880 deposit. The iPhone 4 has a price of around CNY6,000 on the black market, and the services valued at CNY5,880 could also be sold to other China Unicom users. As China Unicom is the sole partner of iPhone in China, domestically sold iPhones are expected to belong to China Unicom’s network. Rival China Mobile is also trying to attract iPhone users although it can provide them only 2G services due to a different 3G standard. China Unicom and iPhone use the WCDMA 3G standard, while China Mobile uses TD-SCDMA. Li Gang, Vice President of China Unicom, said that 1.5 million iPhones have been imported into China, 30% of which don’t run on China Unicom. Taking smuggled iPhones into account, 70% of the iPhones in China are using China Mobile’s network, the Global Times reports.