British mobile operator Three pledges no 4G premium

LONDON Mon Feb 4, 2013 5:49pm GMT

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LONDON (Reuters) - Three, the smallest British mobile operator, said on Monday it would not charge extra for 4G mobile broadband when it arrives on its network later this year, potentially triggering a price war over the supply of faster data.

The operator, owned by Hutchison (0215.HK), said it already offered an "ultrafast" network using the latest 3G technology, called DC-HSDPA, that it said can reach broadly equivalent speeds as 4G using the LTE standard.

Some 55 percent of the British population was covered by its faster 3G network, it said, rising to 80 percent by the end of March, and it will add some 4G coverage later this year.

"We don't want to limit Ultrafast services to a select few based on a premium price and we've decided our customers will get this service as standard," said Three UK chief executive Dave Dy.

EE, a joint venture between France Telecom FTE.PA and Deutsche Telekom (DTEGn.DE), launched Britain's first LTE 4G network in October, gaining a head start on its rivals after Ofcom allowed it to reallocate some its airwaves.

It initially charged a 5 pounds a month premium for the faster service than for broadly the same amount of data on an equivalent 3G price plan.

It has not revealed any take-up numbers yet, but it introduced a lower entry level of 31 pounds a month for 500MB of data last month.

Analysts at Espirito Santo said Three was "somewhat jumping the gun" on its 4G price pledge, since it does not know how much spectrum it will hold at this stage.

The company has bought some spectrum from EE, but it is also bidding for additional airwaves that are currently being auctioned by the regulator.

"It will be negative for the UK operators if Three does undermine their efforts to extract a premium from 4G but, as with 3G, it is likely to attract a disproportionate number of unprofitable, data-hungry customers which we do not think would be sustainable without compromising the quality of its network," the analysts said.

(Reporting by Paul Sandle; Editing by David Cowell)

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