EE Cuts Prices of 4G Plans Before Competitors Buy U.K. Spectrum

EE, the U.K. mobile joint venture of France Telecom SA and Deutsche Telekom AG, cut the prices of its fastest fourth-generation services ahead of an auction that will make the technology available to competitors.

The company’s cheapest plan, which includes 500 megabytes of data, will be cut from 36 pounds ($57.12) a month to 31 pounds for customers who sign up for a two-year contract between Jan. 31 and the end of March, EE said in a statement today.

EE is the first operator to introduce 4G service in the U.K., with typical data speeds five times faster than older, third-generation networks. The company is working to snap up customers before competitors, such as Vodafone Group Plc, acquire spectrum in a U.K. auction beginning this month, Matthew Howett, an analyst at Ovum, said in a note today.

“It is a pre-emptive strike aimed at its competitors who are soon to launch tariffs of their own once the long-overdue auction of 4G licenses is completed,” Howett said. “Trying to convince consumers to buy into something they haven’t yet seen or had experience of is a difficult task, and is further complicated by EE’s desire to both make the most of its head start over the other mobile operators and to clearly differentiate the 4G offering.”

EE has also responded to customers who want more data capacity. The faster 4G networks can encourage customers to use more high-bandwidth applications, such as streaming video and downloads of larger files.

EE more than doubled the size of its largest plan, offering a one-year, SIM-only plan for “super users” who sign up by the end of February with 20 gigabytes of data a month for 46 pounds. The company’s largest plan previously was 8 gigabytes. The bundle is also available with 4G handsets on a 24-month contract at 61 pounds a month, the company said.

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