UK regulator Ofcom has ruled that O2 isn't rolling out its 3G network fast enough. The network operator reached only 76 per cent of the population by the end of 2007, rather than the 80 per cent required by its 3G licence.

The length of the firm's licence could be cut unless O2 reaches its target.

O2 said while the other four licensees have met their commitments on paper - providing open air coverage - it has been concentrating on its superior indoor coverage, so is actually providing 3G coverage to more people as most of us spend our time indoors.

But the firm does accept that the terms of its licence require it to reach 80 per cent of the population, so has promised to improve coverage by the end of June.

Failing to do so will cost O2 dear. Having paid more than £4bn for the licence until the end of 2021, Ofcom will snatch it back in August of that year if the company can't prove it's providing improved coverage.

Ironically, this is exactly the kind of enforcement Ofcom would like to do away with. In the future, spectrum licences will be replaced with SURs (Spectrum Usage Rights) which won't have these kind of public-service remits attached - making life much easier for everyone. ®

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