Telecom group's investment pledge

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

Mr 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 euros (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.

Mr Dunne said since the first smartphone was launched more than two years ago, data usage in the UK has increased by 4,000 per cent, and currently doubles every four months.

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

In its latest update, O2, owned by Spanish parent Telefonica, said it had passed the 22 million mobile customer mark, with 352,000 users added in the three months to September, up 20 per cent on a year earlier.