UK’s Ofcom warns O2 over 3G rollout obligations

Britain‘s communications regulator has warned O2 to speed up the rollout of its third generation (3G) mobile network or risk a reduction in the length of its licence.

Any reduction in O2’s 3G licence could equate to a financial sanction of at least 40 mln pounds, Ofcom said, adding that it wanted to see O2 meet the target by end-June this year.

O2 said it was confident of meeting the deadline.

“Our strategy has been to roll out our 3G network in areas where there is the most demand, providing high quality, in-building coverage in those areas,” O2 said in a statement.

“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.”

Ofcom said each of the five holders of a 3G licence in Britain had been obliged to roll their networks out to provide services to at least 80% of the population from the end of 2007, but O2 has only covered 76% so far.

It estimated the shortfall was equivalent to approximately 2.5 mln people.

In a statement, Ofcom said it could shorten the term of O2’s 3G licence by four months if it did not comply, meaning the contract would expire on August 31, 2021 rather than Decust 31, 2021.

3G technology allows consumers to access the Internet via their mobile phones and watch video. The five 3G licences in the UK are held by H3G, O2, Orange, T-Mobile and Vodafone. (Reuters)