Glasgow mobile consumers will be the first in UK to be able to make calls in underground train stations.
O2 customers on the Glasgow Subway will be able to make the calls.
O2 is the first mobile phone operator in the UK to use a multi-user distributed antenna system, which enables mobile phones to work underground.
The contract, negotiated with transmission provider Arqiva and Strathclyde Partnership for Transport (SPT), will see O2 services installed in five of Glasgow's busiest subway stations - Buchanan Street, St Enoch, Kelvinbridge, Hillhead and Partick.
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The installation will go live this December 2008, and could potentially provide a benchmark for rollouts in other underground stations such as London, in the future.
Although initially limited to platforms and station concourses in the Glasgow Subway, the technology installed by Arqiva could eventually be used to provide coverage around the rest of the SPT underground network.
When the service launches, O2 customers will be able to use 2G services including making voice calls and sending text messages, as well as 3G services such as video, internet access, downloading and multi-media messaging services.
Derek McManus, O2 chief technology officer, said, "This new technology will enable customers to make calls, send and receive text messages and access a host of data services whilst on the subway platform.
"This is the first time that any mobile phone network in the UK has implemented a service like this, and O2 is delighted to be giving its customers the first chance to communicate on the underground."
Gordon Maclennan, assistant chief executive (operations) of Strathclyde Partnership for Transport, said, "This has been sometime in the planning but I am delighted that we can offer this service to our passengers in time for Christmas.
"It is a first for Glasgow and it opens the door for wider Wi-Fi coverage in the underground in future. Accessibility and connectivity are key parts of our continuous Subway modernisation programme."