Mobile operator O2 is urging telecomms regulators to be more flexible over tough rollout targets for 3G networks.

Operators are expected to build out networks so that they cover 80 per cent of the UK population by 2007. Even though it remains confident of meeting this deadline, O2 wants Ofcom to give operators more room for manoeuvre. "We always want maximum flexibility in a business. It doesn't mean whether we will or won't go for the coverage. But it does give us another option," 02 chief executive Peter Erskine said today.

O2 is in talks with the regulator over the issue. Erskine expects other network operators to share similar concerns "given the technology [3G] is some three years late". O2 reckons 3G won't be ready for the mass market until Christmas 2005 so Ofcom ought to be pragmatic about imposing arbitrary rollout deadlines.

German regulations on 3G build-out are far less exacting than those in the UK. The country's four 3G operators have until the end of next year to build a network that can serve 50 per cent of the population. O2 is well on track to meet that timescale, Reuters reports.

Mobile operators see the greatest potential for recouping the huge outlay they forked out on buying licences in concentrating on cities, areas where the greatest pent-up demand for high speed data access over mobile phones is most likely to exist. Ofcom is yet to respond publicly to O2's overtures.

Erskine’s comments came as O2 announced higher than expected sales and plans to issue its first dividend. O2 reported revenues for the six months ending 30 September of £3.285bn, 23 per cent up on the £2.680bn it recorded during the same period last year. Customer growth and higher per user spending in UK, Germany and Ireland were cited by O2 as the main reasons for improved sales this year. ®

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