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O2 Faces Sanction Over Failure to Meet 3G Coverage Requirements

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The UK's telecoms regulator, Ofcom has issued Telefonica 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 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 says that O2 only covered 75.69 percent of the population. This is a shortfall equivalent to approximately 2.5 million people.

The other four 3G license holders have met their license requirements.

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. O2 acquired its 3G licence in 2000 for 4,030m. Ofcom estimates that a reduction of the licence term by four months would be equivalent to a significant financial sanction of at least 40 million.

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