Mobile firm steps up price pressure

3 UK, the third-generation mobile network owned by Hutchison Whampoa, is introducing a new low price tariff as it seeks to poach customers from its rivals.

The new price package will offer 100 voice minutes a month to any network for a monthly fee of £15.

Share prices of rival operators fell on the London market as analysts worried the move could spark a price war in the run-up to Christmas.

Vodafone shares slipped 1.25p to 120p while MMO2 dropped 1.5p to 57.25p.

Broader market

Hutchison launched the 3 network - the UK's first third-generation network - in March, and has set itself the tough target of one million UK customers by the end of the year.

By the end of August it had only signed up about 155,000 people, but said it was still confident the new service would take off.

In June it cut prices to attract more customers, and the latest price package will increase its target market, analysts said.

"It sounds like they're going for a piece of the action of the lower to mid-tier customers," said Stephen Pentland, analyst at Spectrum Strategy Consultants.

Video offer

The company will be hoping that customers who sign up for the £15 a month deal will also go on to use some of its 3G services.

Customers signing up for the new deal will be eligible for its 'Video for Voice' promotion, which allows them to make video calls within the UK for the same price as voice calls.

The offer applies for the first three months of a 12 month contract.

A package aimed at football fans is also being introduced.

For £30 a month, customers will get 500 voice minutes to any network with unlimited football highlights and text alerts.