China Unicom, the country's No.2 mobile carrier, said on Monday that Apple's popular iPhone will retail in China for 5,000 yuan ($732.50), above market expectation, as it seeks to build up its 3G service.

Analysts said Unicom may have set the price high to force buyers of the popular handsets to sign up for packages carrying longer-term contract commitments as competition heats up in the recently reformed sector.

Unicom said the phones would be available for services starting October 1, following its August announcement that it would bring the popular handset to China.

Many companies quote a price for a stand-alone iPhone, but also offer heavily discounted prices for people who sign multi-year service contracts.

Eight service packages would be available for iPhones ranging from 126 yuan to 886 yuan per month, Unicom said in a statement. It said it would provide subsidies of 893 yuan to 4,253 yuan for people who sign up for the plans.

A stand-alone iPhone in Hong Kong starts from around HK$5,388 ($695).

Unicom rival China Telecom has already said it would increase its own handset subsidies to 37 percent of wireless revenues, from 30 percent.

Unicom announced the prices and plans as it embarks on an aggressive campaign to sign up customers for its recently introduced third-generation (3G) cellular service.

Unicom said it had signed up 530,000 3G users since the company started commercial trials of the network in May, including 430,000 cell phone users and 100,000 users of data cards that enable computers connect to the Internet.

China is the world's largest mobile market, with about 700 million subscribers, but the vast majority of those are still using older 2G services.

China Mobile, the world's largest mobile carrier, and the country's two smaller carriers are all being pressured by margins as they are in the middle of a three-year $58.5 billion spending spree through 2011 to build their 3G networks.

Unicom said earlier on Monday it would buy back a stake held by SK Telecom (SKT) for $1.3 billion, as the South Korean shareholder exited after China Unicom's move to boost its alliance with Spain's Telefonica.

($=6.83 yuan)

(Additional reporting by Huang Yuntao; Editing by Chris Lewis)

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