O2 given 3G deadline

UK communications watchdog Ofcom has given mobile operator O2 a deadline to roll out 3G to at least 80 per cent of the population by June 2008, or face losing £40 million.

Ofcom obliged each of the five holders of a 3G licence - H3G, O2, Orange, T-Mobile and Vodafone - to rollout their networks to enable the provision of 3G services to at least 80 per cent of the population from 31 December 2007.

But while four of the licensees complied, O2 only covered 75.69 per cent of the

population. This is a shortfall equivalent to approximately 2.5 million people, Ofcom said.

If O2 has not met the rollout obligation by the end of June 2008, Ofcom will shorten the term of its 3G licence by four months – and as O2 paid £4.03 billion for its licence in 2000, a four-month reduction would be equivalent to a loss of at least £40 million.

In a statement, O2 said: "We have rolled out our 3G network to over 75 per cent of the population. Where we do have coverage it has consistently provided the best quality. We also have one of the larger 3G customer bases.

"We accept that Ofcom is enforcing the terms of our licence. However, we are fully committed to growing our 3G coverage and customer base with the best quality 3G service and are confident that we will have met Ofcom's requirement before June 2008."

3G technology enables consumers to watch video and television and access the internet via their mobile phones as well as offering conventional voice and text services.