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The regulator warned that if O2 missed this deadline, it would reduce the duration of its license by four months, a sanction that Ofcom has calculated would be equivalent to a financial penalty of at least £40m.Under the terms of the mobile phone licenses awarded in 2000, O2, Three, Orange, T-Mobile and Vodafone were all given until the end of last year to ensure their 3G networks covered at least 80 per cent of the UK's population.

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O2 has just four months to avoid contract penalties that would cost it £40m following a warning shot fired across its bows by the telecoms regulator yesterday.

Over the same period, SMS searches will increase nearly six-fold, from 13 billion to in excess of 76 billion.

Juniper Research expects nearly 1.3 billion users – 30% of the mobile subscriber base – to use local mobile search services by 2013.(Local Mobile Search Finds Favor. 29 April 2008) Juniper believes that advertising supported local search will be the key to driving this sector, with the caveat that the effectiveness of advertising in this sector will vary widely according to local conditions.

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