A network problem that disrupted O2’s mobile phone service in the UK yesterday is gradually being restored. O2 says all 2G services were returned to full working order this morning, with full 3G service expected to be restored today.

The problem prevented tens of thousands of mobile phones from making or receiving calls, text messages and online communication.

A new report from Juniper Research says ‘smart accessories’ that connect with mobile phones will become a major new market for manufacturers over the next five years. Examples of these wireless accessories include health monitoring equipment, fitness accessories and payment devices.

It forecasts that just over 10 million task-specific smart devices will be produced this year, with annual sales expected to exceed 100 million units by 2017.

Earlier this year Starbucks introduced its iPhone mobile payment app to the UK - and the coffee company has now added an Android app as well.

The new Android app, which is also launching in Canada, enables customers to pay via a Starbucks Card account using an on-screen barcode. It’s also possible to manage a card account, check loyalty rewards and find local stores.

Last week Telefonica UK extended its partnership with G4S Utility Services, which is part of the G4S security group.

The new five-year agreement includes the provision of up to 1.4 million O2 SIM cards for ‘smart’ gas/electricity meters and is one of the largest-ever M2M deals in the UK.

There's plenty of variety in The Fonecast this week. We start the podcast with news of MeeGo's resurrection by Finnish smartphone company Jolla before talking about a mobile network that’s giving away mobile data whenever its customers watch video advertisements.

There's also time to discuss Telefonica's recent deals, the rise of free WiFi availability, tablet-related legal action, malware in the Apple App Store and the truth behind a recent 'exploding mobile phone' story.