Mobile phone company O2 is facing a multi-million pound penalty unless it hits a target to roll out its 3G network across the UK.
The 3G technology enables consumers to watch video and television, and access the internet via their mobile phone.
Each of Britain’s five mobile phone companies had to provide 3G services to at least 80% of the population by the end of 2007.
But telecoms regulator Ofcom found O2’s service covered just over 75% of the population – about 2.5 million people short.
It has told O2 that if it hasn’t achieved the 80% target by the end of June this year, it will shorten the term of its 3G licence – which is currently due to end in December 2021 – by four months.
Ofcom estimates this move would be equivalent of a fine of at least £40 million.
O2 said it was confident of meeting Ofcom’s new June deadline.
It added: ‘Our strategy has been to roll out our 3G network in areas where there is the most demand, providing high quality, in-building coverage in those areas.
‘We have rolled out our 3G network to over 75% of the population. Where we do have coverage it has consistently provided the best quality. We also have one of the larger 3G customer bases.’
Which? technology expert Ceri Stanaway said: ‘These 3G services are becoming increasingly important, allowing people to do all sorts of things on their mobile – and these days even offering a wireless alternative to standard broadband services on your computer.
‘So it’s important that if phone companies are to be granted a 3G licence that they fulfil their obligations to make the service available to as many people as possible.’