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Vodafone turns to sport and songs to sell 4G in Britain

By Paul Sandle

LONDON (Reuters) - Vodafone has turned to sports and music to set its 4G superfast mobile service apart when it finally launches in Britain later this month in competition with O2 and the well-established offer from EE.

The mobile operator, the third largest after EE and Telefonica's O2 in Britain, is offering 150 hours of Premier League soccer from Sky Sports or music from online streaming service Spotify Premium as well as unlimited data for three months to customers who switch.

"Our view on what 4G brings is very different to our competitors," Guy Laurence, chief executive of Vodafone UK, said on Wednesday.

"We believe it's all about entertainment, so we intend to bring our customers the very best in entertainment built into the price plans for 4G."

Britain has been slow to introduce superfast broadband compared with the United States and other European countries.

Vodafone is joining O2 in launching 4G services on August 29, bringing competition to EE, which has had the superfast mobile broadband market to itself since October 2012.

The roll-out is seen as vital to the future of mobile operators which have been squeezed by fierce competition and falling prices in their core European markets, while having to provide faster networks for consumers who increasingly want to watch video on the go.

The Vodafone 4G service, which starts at 26 pounds ($40) a month, in line with rivals, will be available only in London at launch, and in 12 further cities by the end of the year.

But all Vodafone customers will be able to add the sport or music services to existing bundled packages of data, texts and voice calls for an additional 5 pounds a month, Laurence said, and then move to the faster network when it is rolled out.

Ovum telecoms analyst Emeka Obiodu said it was remarkable that Vodafone was focusing on the tariff and content rather than speed and coverage.

"We sense that Vodafone wants to avoid the 3G lesson where it worked so hard to create the best 3G network, yet lost out as rivals, especially O2, delivered a better appealing proposition to customers," he said.

"So this time, Vodafone is focusing on getting the commercial proposition right. We expect the deals with Spotify and Sky Sports to appeal to a lot of customers, although the downside is that Vodafone might have been forced to rush out the announcement, when it has covered only a few cities, as to sync with the start of the Premier League."

EE, a joint venture between Orange and Deutsche Telekom, launched Britain's first 4G network in October after regulators allowed it to re-use its existing airwaves.

It has sold its service on speed, and it offers a 24-30 megabits-per-second (Mbps) service in 15 cities, and a standard 12-15 Mbps services in a further 80 towns and cities. It had signed up 687,000 customers by end-June, which it said put it on track for 1 million by the end of the year.

Laurence said Vodafone did not have a public target for customer numbers, but he was confident that its focus on entertainment would attract customers from competing networks as well as rewarding loyal Vodafone subscribers.

(Reporting by Paul Sandle; Editing by Kate Holton and Pravin Char)