Signs that the iPhone 3G fad is taking its toll on fledgling 3G networks has started to show in Australia.

The Optus 3G mobile network is on its knees with customers reporting connection problems and an unusable service in North Sydney. Optus has been following Apple and refusing to acknowledge the problem while its 3G network crashes and burns, according to the Sydney Morning Herald.

The carrier's heavy promotion of aggressively priced wireless broadband and iPhone 3G plans has netted so many users that the network simply cannot cope. For a while Optus could blame connection problems in the iPhone hardware, but since this has been fixed it is becoming increasingly obvious that its own network is not up to the job.

The worst of the complaints have come from North Sydney, where users have been forced to drop down to the inferior 2G network just so they can receive calls. Regulators have sat on their hands and done little to compel Optus to improve its 3G network performance.

Punters can’t leave because they face significant fees should they terminate their contracts early.