The network said it will switch on fourth-generation (4G) mobile internet on August 29 in London, Leeds and Bradford.
The new network will allow mobile downloads up to five times faster than 3G and let smartphone and tablet PC users watch TV on the move. It will reach up to five million people at its launch and be rolled out to 13 cities by the end of the year.
O2 follows rival EE, which launched its own 4G network last year, in overhauling its network to cater for soaring demand from data-hungry smartphone and tablet users.
The company, owned by Spain's Telefonica, spent £550 million buying 800 megahertz (MHz) spectrum or airwaves from the Government earlier this year. It said the low-frequency spectrum "reaches further than any other", giving the best indoor penetration and outdoor reach.
O2 said customers will pay from £26 a month to access the faster network and be offered sweeteners including 12 months' free music content.
The company will announce more detail on 4G's launch in Birmingham, Newcastle, Glasgow, Liverpool, Nottingham, Leicester, Coventry, Sheffield, Manchester and Edinburgh in coming weeks. It plans to reach an extra two million customers with 4G every month, culminating in 98% coverage of the population with 2G, 3G and 4G.
Regulator Ofcom's auction of 4G spectrum in February raised £2.3 billion for the Government, less than forecast, with 3 owner Hutchison, BT, EE and Vodafone the other successful bidders.