Ofcom to make O2 meet 3G rollout obligation

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Mobile phone company O2 was today threatened with regulatory action after it failed to meet a deadline to provide its 3G network to 80% of the UK population.

Communications watchdog Ofcom said it would reduce O2's 3G licence by four months if the operator did not meet a second deadline at the end of June.

The other four holders of 3G licences complied with Ofcom's original requirement for the end of December - at which stage O2's network covered 75.69% of the population, a shortfall equivalent to around 2.5 million people.

O2 acquired its 3G licence in 2000 for £4bn. It is due to run until the end of December 2021, but this could be reduced to August 2021 at an estimated cost to O2 of at least £40m, Ofcom said.

O2 said it was confident of meeting Ofcom's new June deadline.

It added: "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.

"We have rolled out our 3G network to over 75% 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."

The 3G technology enables consumers to watch video and television and access the internet via mobile phones.