--Ofcom gives Everything Everywhere the nod to provide 4G services

--Decision gives mobile operator a head start over rivals

--Three UK buys spectrum from Everything Everywhere as part of its 4G plans

(Adds details on Three UK buying spectrum from Everything Everywhere in 14th graf.)

By Lilly Vitorovich

LONDON--The U.K. will have superfast mobile Internet access by the end of this year after communications regulator Ofcom gave the nation's No. 1 mobile operator Everything Everywhere the green light to use its existing network to provide faster speeds.

The decision gives Everything Everywhere--the U.K. joint venture of Deutsche Telekom AG (DTE.XE) and France Telecom (FTE)--a good six months headstart over rivals like Vodafone Group PLC (VOD.LN), Telefonica SA's (TEF) O2 and Three UK. They will have to wait for the U.K. to auction more mobile spectrum early next year before they can offer a similar service.

Fourth-generation, or 4G, mobile broadband typically allows consumers to download data such as movies, music and video some ten times faster than older 3G networks.

The U.K. is lagging badly in its rollout, with some 45 countries, including the U.S., Germany, Scandinavia and parts of Asia, already offering the superfast service to businesses and consumers. Top-of-the-range mobile phones are all 4G capable, though not all will work on the frequency Everything Everywhere is using. It's also unclear whether Apple Inc.'s (AAPL) hotly anticipated iPhone 5, widely expected to be launched next month, will work on that frequency.

A Everything Everywhere spokesperson called the Ofcom's decision good news for the U.K.

"4G will drive investment, employment and innovation and we look forward to making it available later this year, delivering superfast mobile broadband to the UK," the spokesperson said.

Everything Everywhere said it will launch its 4G services by the end of the year under a new brand that will sit alongside its existing Orange and T-Mobile brands. It didn't say how many consumers or businesses will be able to benefit.

Matthew Howett, an analyst at research firm Ovum, said the company has enough spectrum to reach a "good proportion" of the country, depending on whether the network upgrade is completed in time.

"I know from discussions with them that's something they've already started a number of months ago, so I think they should be in a fairly good position from the get go," he said.

The faster service will allow people to download a movie in 10 minutes or an album in 60 seconds, down from an hour via a 3G network in use today. It could also give people in more rural areas access to superfast broadband in their homes for the first time.

Everything Everywhere's ability to steal a march on its rivals is the result of the merger of Deutsche Telekom's T-Mobile and France Telecom's Orange networks, giving the combined company a surplus of spectrum.

Ofcom's decision to allow Everything Everywhere to use the spectrum for 4G, angered its competitors.

"We are frankly shocked that Ofcom has reached this decision," a spokesperson for Vodafone's U.K. business said. "The regulator has shown a careless disregard for the best interests of consumers, businesses and the wider economy through its refusal to properly regard the competitive distortion created by allowing one operator to run services before the ground has been laid for a fully competitive 4G market.

Telefonica's O2 said it was "hugely disappointed."

Three UK, the smallest of the U.K.'s four mobile operators signed a deal Tuesday to buy 4G spectrum from Everything Everywhere for an undisclosed sum. The deal was part of an agreement Everything Everywhere made with the European Commission to get approval for its merger. It's unclear, however, when Three will be able to use it.

"We can only use the spectrum when it is cleared - and Everything Everywhere isn't obliged to do that until Sept 30 2013," a Three UK spokesman said.

The competitors could appeal Ofcom's decision, and so block the Everything Everywhere's 4G launch. A Vodafone spokesman said the company is considering all options, including legal action.

Ofcom last month said it would kick off an auction of mobile spectrum in the U.K. before Christmas, paving the way for mobile operators to offer 4G services from the second half of 2013. The timetable for the auction has been delayed by a year due to consultations and threats of legal action, as operators jostled for the biggest chunk.

Write to Lilly Vitorovich at lilly.vitorovich@dowjones.com; Twitter: @LillyVitorovich

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