O2 may see $79.6m fine for slow 3G growth

British phone carrier O2 could pay as much as £40 million ($79.6 million US) for failing to build out its 3G cellular data network on time, the country's Office of Communications (Ofcom) noted on Wednesday. Despite its role as the single largest provider in the region, O2 is the only one out of five firms granted licenses for 3G access that did not supply at least 80 percent of the UK population with the faster network by the end of 2007.

While currently close to that figure at 75.7 percent, the company is well behind rivals such as Vodafone UK and now has until June 30th to at least reach the 80 percent mark without suffering both a termination of its 3G license four months early and the resulting fine.

O2 itself says there should be no difficulty reaching the target but justifies the comparatively slow expansion by claiming that it has focused chiefly on pockets of high demand rather than sheer population numbers. In areas where subscriptions were high, the company reportedly spent extra time ensuring strong enough 3G coverage indoors as well as out. There are also more 3G subscribers on O2 than on other carriers, O2 stresses.

The buildout is believed to be crucial for O2, which itself is poised to drive the adoption of 3G in Britain through sheer numbers. The company is the sole sanctioned carrier for the iPhone in the country and is expected to need sweeping coverage to support a 3G-capable iPhone expected later this year.

Filed under: iPhone
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