O2 will launch its 4G mobile network later this month, it has announced.

The Telefonica-owned operator will make its 4G services available in London, Leeds and Bradford on 29 August.

O2 invested about £550m to secure the UK’s lowest frequency spectrum (800Mhz), in a Government auction held in May.

The UK mobile operator’s move will rival EE, which has been offering 4G since last November, when it won approval to re-use its existing network for the superfast broadband.

Telefónica UK CEO Ronan Dunne said that 4G has the potential to change the way we live by ensuring fast wireless connection, but admitted that its new 4G network will not be compatible with the iPhone 5.

"The full potential of 4G is as yet unexplored, but what we can be sure of is that it will allow for a whole new world of opportunity that people are now ready for," Dunne said.

"Over half of our customers say they use more data than two years ago and even more use WiFi wherever they go, to always stay connected.

"Given this trend, there is no doubt that 4G will transform our lives, be it as consumers, in business or through public sector services."

As part of the launch, O2 will also offer 12 months of free music content for its 4G users, but its basic tariff will start from £26 a month, £5 more than EE’s cheapest rate for voice and data.

However, because O2 has not revealed what the tariff will include it is not possible to directly compare the two.