Hutchison Whampoa Ltd's UK mobile-phone unit will start a faster fourth-generation network next year using spectrum from rival EE, reducing the company's need to buy expensive frequencies in an upcoming auction.

Hutchison's Three division last month reached an agreement to buy the necessary spectrum from EE, the UK mobile-phone venture of Deutsche Telekom AG and France Telecom SA, which is rolling out the country's first 4G network. Hutchison Managing Director Canning Fok told journalists in Vienna on Tuesday that Three will start its 4G offering next year.

EE, the UK's largest wireless operator, got regulatory approval this year to use licenses in the 1,800 megahertz spectrum to deliver the faster connections, giving it a head start on Vodafone Group Plc and Telefonica SA, which are waiting for more frequencies to become available at an auction before starting their own similar services. The deal with EE lessens the pressure on Hutchison, the smallest British operator, to buy expensive frequencies at that auction.

The auction of 800 MHz and 2,600 MHz frequencies is set to begin later this year. Regulator Ofcom has said the earliest the new spectrum will be available for use is November 2013.

EE divested some of its 1,800 MHz spectrum to Hutchison to fulfill commitments given when the European Commission approved the merger of France Telecom and Deutsche Telekom's UK units in 2010.

(HK Edition 09/26/2012 page2)