O2 and T-Mobile in 3G roll-out pact

Mobile operator O2 is to pay rival T-Mobile £137m for greater access to its third-generation (3G) phone network in Germany.

According to The Independent, the move is being seen as a sign that O2 is more likely to hang on to its German business, although its loss-making Dutch operation is still thought to be up for sale.

An O2 spokesman said that the deal with T-Mobile in Germany would enable O2 to launch a mass-market 3G phone service more cost effectively and in the same timeframe as the firm's two major competitors.

The deal is an extension to one signed in 2001 to co-operate on the roll-out of 3G network equipment in the UK and Germany.

Under the terms of its licence, 02 must provide 3G coverage in Germany to at least 25 per cent of the population by the end of 2003, and to 50 per cent by the end of 2005.