5038375257 63a5eb9573 b Chinese mobile operators war of words escalatesThe battle between China’s two largest mobile providers, China Mobile and China Unicom is hotting up as each tries to win over the lucrative iPhone market.

China Unicom, is still the only carrier licenced to sell the iPhone in China. Recent statistics, based on the alternative contact number required when signing up, show that about 73% of China Unicom’s iPhone customers have come to them from China Mobile.

The Chinese mobile market is still immature when compared to the west and users are unable to transfer their mobile number to a new provider.  While that situation is changing with new services rolling out in a couple of cities, most people purchasing iPhones from China Unicom have opted to keep their existing accounts and numbers with China Mobile as well.

China mobile have been quick to spot this opportunity in the market and have been offering services to users to cut down their existing China Mobile SIM cards to fit the new iPhone 4.  They have also set up a hotline to assist subscribers in getting an iPhone working on China Mobile’s network.

New reports today suggest that China Unicom are countering China Mobile’s moves by threatening to freeze the accounts of users who separate their iPhone and SIM card.  This will not have a significant effect on the users who have switched to China Mobile in terms of the use of their iPhone but it does mean that they stand to lose their deposit of 5,880RMB. (about US$885).  Of course, with grey imports of iPhone 4’s selling for about 6,000 RMB (about US$900), this move may just serve to drive more potential customers to the grey market instead.

If China Telecom, the third largest mobile operator in the country get the iPhone, as we speculated here, then things could get a whole lot more interesting.