Telefonica Unveils Faster U.K. Wireless Plan to Challenge EE

Telefonica SA (TEF)’s O2 will introduce faster, fourth-generation wireless services in the U.K. at the end of this month, becoming EE’s first challenger.

The subscriptions will be available in London, Leeds and Bradford on Aug. 29, followed by 10 additional cities by the end of the year, O2 said in a statement.

Already behind their counterparts in Germany, Sweden and the U.S., carriers in the U.K. are rushing to build 4G networks, which command a higher price for services and let customers stream video and television shows on tablets and mobile phones. EE, a venture of Deutsche Telekom AG (DTE) and Orange SA (ORA), has had a nine-month headstart, winning about 700,000 4G customers.

O2 said its 4G plans will start at 26 pounds ($40) a month. EE’s cheapest 2-year plan for contract customers also costs 26 pounds a month and comes with a free smartphone and 500 megabytes of data. EE’s so-called SIM-only plans, which don’t include devices, start at 21 pounds a month. O2 didn’t give additional details for its price plans.

“Over half of our customers say they use more data than two years ago and even more use Wi-Fi wherever they go, to always stay connected,” O2 Chief Executive Officer Ronan Dunne said in the statement.

Clearing Airwaves

Ofcom, the U.K. telecommunications regulator, yesterday said it had finished clearing the airwaves in the 800 megahertz frequency band used by O2, removing interfering signals like digital TV channels and wireless microphones. As part of the license rules, Telefonica must reach 98 percent of indoor coverage in the U.K. by 2017.

EE received regulatory approval in 2012 to use its licenses in the 1,800 megahertz band of spectrum, which was already clear for use, allowing it to offer 4G ahead of Telefonica and Vodafone Group Plc (VOD), its two biggest competitors.

The U.K. government raised 2.34 billion pounds from five bidders for the spectrum in February. Newbury, England-based Vodafone bought the most, spending 790.8 million pounds, and has said it will offer 4G service by the end of the summer. Telefonica spent 550 million pounds. Hutchison Whampoa Ltd.’s 3 unit and BT Group Plc (BT/A) also paid for licenses.

To contact the reporter on this story: Amy Thomson in London at athomson6@bloomberg.net

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

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