Britain to get 4G after squabbling operators make deal

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By Kate Holton | October 3, 2012 6:14 AM EST

Britain's mobile operators have put aside their hostilities and agreed to accelerate the roll-out of super fast broadband to prevent Britain from falling further behind in the race for connectivity.

Britain's operators EE, Vodafone Group Plc, O2 and 3 have been at loggerheads over the allocation of spectrum, forcing the government and regulator Ofcom to step in and broker a deal. 02 is owned by Telefonica SA and 3 by Hutchison Whampoa.

The agreement signed on Tuesday means market leader EE, formerly known as Everything Everywhere and owned by France Telecom SA and Deutsche Telekom AG, will be able to launch fourth generation services before the end of the year.

The remaining operators will be able to buy spectrum in an auction now scheduled for early next year and roll out 4G services in the first half of 2013, six months earlier than expected.

"Delivering 4G quickly is a key part of our economic growth strategy," Maria Miller, secretary of state for culture and media, said in a statement. "I am grateful to the mobile operators for their co-operation in bringing forward vital 4G services."

The government hopes the deal will bring to an end the spat that broke out between the four groups when regulator Ofcom allowed EE to re-use its existing spectrum to launch 4G services early, giving it a huge advantage.

To appease the other operators and avoid legal action, Culture minister Miller agreed to speed up the launch for their services. The operators welcomed the breakthrough.

The government, which is trying to stimulate growth in a country still grappling with recession, feared the threat of legal action would further hamper the roll out of 4G, a technology that speeds up mobile broadband access.

"We anticipate that 4G services will boost the UK's economy by around 2 billion to 3 billion pounds ($4.8 billion)," Miller said. "High-speed mobile connections, will mean that online services can be accessed more easily and quickly."

Britain has fallen behind many other European countries in the roll out of 4G and was under pressure to reach a deal.

"After more than five years in the making, finally the schedule to award spectrum for 4G appears to have been agreed," said Matthew Howett, the leader of research group Ovum's telecoms regulatory practice.

"In a matter of weeks, the UK has gone from being behind countries such as Angola, Azerbaijan and Uzbekistan to one with one of the most ambitious 4G roll out strategies we have seen."

Fourth generation networks provide Internet speeds on smartphones and tablet computers up to 10 times faster than currently available, allowing mobile users to watch video, host video conference calls and play interactive games without delay.

"Essentially the idea was to avoid any legal action that would delay the auction, principally by reducing the gap between EE being able to roll out a 4G service and the others being able to roll it out with the spectrum they get in the auction," a government source had told Reuters before the meeting.

($1 = 0.6196 British pounds)

(Additional reporting by Paul Sandle.; Editing by Catherine Evans and Andre Grenon)

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