UK Mobile Phone Price War Heats Up
Oct 1, 2003
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The price war between UK mobile operators appears to be heating up, with the country's largest independent retailer of mobile phones saying that customers are being offered the best deals ever.

Andrew Harrison, U.K. chief executive of Carphone Warehouse Group PLC , said a series of deals should make October "the most amazing month for tariff deals." The mobile operator 3 announced its cheapest ever contract, 100 minutes of talk a month for GBP15.

The company operates the U.K.'s first third-generation, or 3G, network and is scrambling to try and pry users from existing operators.

The move is an intensification of 3's strategy of luring users through cheap voice calls rather than services that showcase the technological prowess of its network.

"This plan is a major step in attacking the mobile incumbents market share," ABN Amro's Rodney Sherrington said in a note, "but the impact will be muted while H3G continues to have major problems with their handsets and quality of service."

3 fired the first shots in a price war in June, but other operators initially declined to respond, believing that users wouldn't jump to 3 because of its limited selection of handsets. The handsets are also heavier than those used on existing networks and have short battery life.

T-Mobile began to fight back in early September, when it offered users who joined before the end of November an additional 50% extra airtime.

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