After suffering two major service outages in the U.K., Telefónica UK Ltd. 's O2 said it will remove the central user database supplied by Ericsson AB (Nasdaq: ERIC) that took its network down on both occasions. (See Outage Strikes O2 UK.)

The rip-and-replace project will cost the operator £10 million (US$16 million), which is in addition to the £1.5 million ($2.4 million) that O2 claims it spends on its network each day.

In a statement issued on Wednesday, O2 COO Derek McManus said: "We are removing the Central User Database provided by one of our suppliers, which has suffered two different faults in the last few months. We are not prepared to risk this happening to our customers for a third time and are implementing a proven alternative solution."

An O2 spokesman said the operator had not yet decided which vendor or product would replace the Ericsson database.

On July 12, the O2 network was down for almost 24 hours in some places and left about 7 million customers without services. On Oct. 12, the operator suffered a similar outage that it says left 10 percent of its customers without service. The operator has 22 million customers in the U.K.

In response to O2's decision, Ericsson issued its own statement today:

Why this matters
Clearly, this is bad news for Ericsson. To be the supplier of the piece of equipment responsible for bringing down a customer's network and then being kicked out of that network is a blow.

O2's response today also reveals the cost to the operator of major network outages -- not just for equipment replacement, but also all the other investment they will need to make to restore confidence among their subscribers. It would seem that £10 million is only a start for O2.

For more

— Michelle Donegan, European Editor, Light Reading Mobile