O2 3G shortfall could cost it £40 million
Oops. I bet the execs at O2 are not best please at the moment, after Ofcom has delivered a severe slap on the wrist - a slap on the wrist that could be worth up to £40 million.
The problem? 3G network coverage. When 3G licences were doled out in 2000, O2 dug deep and paid £4 billion or so. One of the conditions it signed up on buying its licence was to cover 80 percent of the population with its 3G network by the end of this year - a figure the regulator says it’s failed to meet by around 5 percent or 2.5 million people.
If O2 doesn’t get the network out to the full 80 percent by the end of June this year, it could see its 3G licence cut short by four months, a sanction worth around £40 million. With that kind of cash at stake, I reckon those 2.5 million people can expect to get their 3G any time soon.
I think the £40 million figure may be a bit of a red herring - that’s projected revenue, not an actual fine.
As Engadget have pointed out, O2’s license doesn’t expire till 2021! I bet their quaking in their boots at the thought of the license expiring 4 months earlier in September 2020!
See: http://www.engadgetmobile.com/2008/02/28/o2-threatened-with-hilarious-penalty-for-poor-3g-coverage/
Posted by Jonathan Mulholland on February 29th, 2008 at 9:40 am.But the public perception will be “O2 Loses License Due To Crap Coverage”. That’s not the message that you want to be giving out when you’re trying to attract new customers.
Posted by Terence Eden on February 29th, 2008 at 10:55 am.I’m baffled.
Surely nobody’s going to be using 3G in 2020? Or 2015?
We’ll all be on some superWiMax connections by then. I hope.
So there’s no actually penalty for O2.
But all the O2 customers who are currently paying for 80% 3G coverage, and only getting 75% — they’re paying the penalty and ought to be compensated.
Or have I got everything the wrong way around again?
Posted by HeavyLight on February 29th, 2008 at 8:51 pm.HeavyLight’s last blog post..S60 not a Touch on the iPhone