Ofcom Goes for O2

Communications regulator Ofcom has issued O2 with a deadline for meeting its 3G rollout obligation, and told the operator what steps it proposes to take should it still not be in compliance when the deadline arrives.
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% of the population from 31 December 2007. Having completed its assessment of compliance with the obligation, Ofcom found that although four of the five licensees  – H3G, Orange, T-Mobile and Vodafone – have complied with the requirement, O2 only covered 75.69% of the population at the end of last year. The shortfall equates 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. This would mean that O2s licence would end on 31 August 2021, rather than 31 December 2021.
O2 acquired its 3G licence in 2000 for 4.03 billion. 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.