IPhone 3gs No Service with 3G - works ok on 2G??

Hello,
My iPhone 3GS displays the 'No Service' symbol when on 3G, but works fine with 2G.
I have swapped the sim, same thing. My sim works fine in another phone.
I have restarted, restored, reset network, everything. It all points down to a fault with the handset but the Apple store want £119 to exchange it!
Has anyone got any ideas what the fault could be and how to rectify it?
It has not been unlocked or jailbraked.
Thanks

I'm assuming that you were patient when you turned on 3G. I have a 3GS and when I first turned on 3G (Setting/General/Network Enable 3G) the display read no service for about 2 minutes before showing a signal.
Also, and I'm not sure about this, it might be necessary to have a Wi-Fi link when you 1st enable 3G as it might be the case that the phone needs to update the carrier settings.
Also, in Settings/Carrier, I think that Automatic should be ON.

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