Britain’s High-Speed Mobile Service to Cost $9 Billion

Photographer: Jason Alden/Bloomberg

Everything Everywhere Chief Executive Officer Olaf Swantee. Close

Everything Everywhere Chief Executive Officer Olaf Swantee.

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Photographer: Jason Alden/Bloomberg

Everything Everywhere Chief Executive Officer Olaf Swantee.

Everything Everywhere said its plan to offer high-speed mobile-phone services as the first U.K. operator will spur rivals including Vodafone Group Plc (VOD) to increase investments as carriers need to spend 5.5 billion pounds ($9 billion) on the service by 2015.

The U.K. venture of France Telecom SA (FTE) and Deutsche Telekom AG (DTE) has asked regulators for permission to deploy the faster technology on its existing airwaves, as it targets a so-called fourth-generation service by the end of this year. Vodafone has opposed the move, seeking to prevent London-based Everything Everywhere from offering faster services before anyone else.

“This will spur investment in the U.K.”, Everything Everywhere Chief Executive Officer Olaf Swantee said today in an interview. “Without 4G, it’s really difficult for our networks to cope with the traffic.”

Everything Everywhere wants to move ahead of rivals, who are waiting for more frequencies to become available before starting their own services. The carriers are betting that high- speed services will persuade subscribers to use more applications on smartphones including Apple Inc. (AAPL)’s iPhone and handsets using Google Inc. (GOOG)’s Android system.

“We strongly believe that a competitive market for 4G services – as exists in other European markets – is in the best interests of everyone,” Vodafone said today in an e-mailed statement.

Everything Everywhere today said operators will spend 5.5 billion pounds to upgrade equipment and build out new networks by 2015, citing research it commissioned from Capital Economics.

Everything Everywhere is spending 1.5 billion pounds over three years to cope with soaring demand for mobile Web services and will invest about 9 percent of its revenue, or more than 500 million pounds per year, on the network thereafter, Swantee said.

Everything Everywhere will submit further documents to U.K. regulator Ofcom by May 8, the CEO said.

To contact the reporter on this story: Jonathan Browning in London at jbrowning9@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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