Mobile phone operator O2 has announced it will launch its own high-speed 4G network in three UK cities on August 29.

O2 – which is owned by Spain’s Telefonica – said it will initially offer 4G in London, Leeds and Bradford.

However, the firm said it is planning to rollout 4G to a further 10 cities by the end of the year, including: Birmingham, Newcastle, Glasgow, Liverpool, Nottingham, Leicester, Coventry, Sheffield, Manchester and Edinburgh.

O2’s 4G service will directly compete with EE (formerly Everything Everywhere), which has its own 4G service available in 95 UK cities and has a cheaper basic tariff than O2’s lowest-cost tariff.

O2 has said that its cheapest tariff will cost £26 a month while EE’s lowest rate is £21 a month for calls and data or £15 a month for just data.

So far, EE has signed 687,000 users up to 4G but this still only accounts for 2.5 per cent of its 27 million customers.

Unlike its rival, O2 won’t support the current iPhone 5, which is one of the leading handsets in the UK.

Telefonica paid £550m for O2's 4G licences, which will use the 800MHz part of the radio spectrum, which has recently been cleared by Ofcom for the launch of 4G.

The next mobile operators to launch 4G services in the UK are expected to be Vodafone and Three after they managed to secure a slice of spectrum earlier this year.

Switching to a 4G network allows customers the chance to download content several times faster than is possible on 3G.

Ofcom estimates 4G services will provide at least £20bn in benefits to UK consumers over the next ten years.