EE Introduces 4G Offer in U.K. to Undercut Vodafone’s Pricing

EE, the biggest U.K. mobile company, will offer a cheaper plan on its faster, fourth-generation network as it works to challenge Vodafone Group Plc (VOD) and Telefonica SA (TEF)’s O2, which began offering 4G services this year.

EE, which is co-owned by Orange SA (ORA) and Deutsche Telekom AG (DTE), will sell a 500-megabyte monthly data plan for as little as 18.99 pounds ($30.43) a month starting on Oct. 30, the company said in a statement today. Customers will pay for a handset separately.

The cheapest 4G plan at O2 is 22 pounds a month and Vodafone’s is 26 pounds, both of which offer at least double the data allowance of the new EE offer. The companies differ on contract terms and handset prices. EE is betting that a wider variety of price points and data packages will help win over new customers as rivals begin building out competing networks.

“We are launching new plans for light users, super users, regular users, data sharers and Britain’s mobile workforce up and down the country,” Chief Executive Officer Olaf Swantee said in the statement. “We want to bring the power of 4GEE to even more people.”

A Nokia Lumia 625 on EE’s 18.99-pound monthly plan would cost 99.99 pounds, the company said. Vodafone gives customers the same phone free on a two-year contract when they sign up for a 38-pound-per-month deal and 2 gigabytes of data, according to the company’s website. At O2, the same phone would cost 240 pounds with a two-year contract, either paid monthly or upfront on top of its 22-pound 4G plan which includes 1 GB of data.

Data Allowances

EE has also expanded its double-speed 4G “Extra” service, first rolled out last month, to include data allowances of as much as 50 GB for 74.99 pounds a month, the company said. Customers can share their plans with as many as four others. Vodafone and O2’s consumer plans go up to 8 GB a month.

After giving EE more than a nine-month head start while they waited for spectrum that carries the high-speed signals to be auctioned, Vodafone and O2 began selling service in London in August. Newbury, England-based Vodafone plans to add several large cities in the north of England, including Liverpool and Manchester, by the end of the month, and will cover 98 percent of the population by 2015.

Three, owned by Hutchison Whampoa Ltd (13), will begin offering 4G service at no extra cost in December, covering 1.5 million customers by January, the company said in August.

The new networks, which offer data speeds five times faster than third-generation technology, may help struggling European carriers increase customers’ monthly bills as they charge more for better service. EE has said customers who move up to 4G from other plans pay about 10 percent more for their service.

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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