Ofcom Acts Against O2 re: 3G

Ofcom today issued O2 with a deadline for meeting its 3G rollout obligation and what steps it proposes to take should the mobile phone operator still not be in compliance.
The obligation requires 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.

Ofcom has now completed its assessment of compliance with the obligation. Four of the five licensees have complied, but O2 only covered 75.69 percent of the population. This is a shortfall equivalent to approximately 2.5 million people.

Ofcom has now issued O2 with a notice under the procedure in the Wireless Telegraphy Act for licence breaches. This proposes that 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, the equivalent to a significant financial sanction of at least £40 million.

"O2’s 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. " an O2 spokesperson told MB.

"We accept that Ofcom is enforcing the terms of our licence. We are fully committed to increasing our 3G coverage and customer base with the best quality 3G service, and are confident that we will meet Ofcom’s requirements before June 2008"

O2 has until 30 June 2008 to make representations to Ofcom and to demonstrate that it has complied with the obligation. Ofcom will publish a statement on the matter after that date. If Ofcom decides to reduce the term of O2’s licence it would end on 31 August 2021 rather than 31 December 2021.

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