O2 chief pledges 25% rise in investment to boost smartphones

The boss of mobile phone giant O2 UK yesterday said his company would ramp up investment in network infrastructure to support demand for smartphones, like Apple's iPhone and Blackberry's Torch.

Chief executive Ronan Dunne said O2, the UK's second largest telecoms provider, is currently pumping 1 million a day into its network, a figure that will increase by up to 25 per cent in 2011.

Dunne said O2 had the highest proportion of smartphone customers in the market and would spend the cash on new infrastructure as well as improving its existing spectrum - the airwaves it operates over.

The plans for future investment come as smartphone sales boosted O2's revenues in the nine months to September by 5.6 per cent to €5.3 billion (4.5bn).

Smartphones have driven sales across the highly competitive mobile phone market, with Vodafone reporting a 5.2 per cent boost in second quarter UK revenues earlier this week.

Dunne said that since the first smartphones were launched, data usage in the UK had increased by 4,000 per cent, and currently doubles every four months.

"There's big investment in creating the digital dividend, so to speak, for customers," said Dunne. "There will be a combination of new infrastructure, new sites and deploying new technology."

The company has started to upgrade areas of its network from 2G to the faster 3G airwave technology, used by the iPhone and Torch.

Looking further ahead, Dunne said the government would soon be auctioning off airwaves previously used for analogue television, no longer required as digital TV becomes the norm. These airwaves will eventually be used for an even faster 4G technology, likely to be rolled out in 2012 and 2013.

Dunne said: "We (the industry] all have to invest and increase the capability of the network."