BT and One2One lose 3G appeal

Judges rule that the government acted within the law when it gave Vodafone and Orange more time to pay for their 3G licences

BT and One2One have failed in their attempt to change the terms of payment for third-generation mobile phone licences.

According to reports on Wednesday morning, the Appeals Court has decided that it was acceptable for the government to grant Vodafone and Orange extra time to pay for their 3G licences. BT and One2One have argued that this decision saved Orange and Vodafone at least £75m and £100m respectively in accrued interest. This, claimed BT and One2One, distorted competition in the mobile market.

If BT and One2One had persuaded the Appeals Court that they had been treated "unfairly and irrationally", they planned to sue the Government for £85m each -- the amount they claim they have lost in interest through having to pay 16 weeks earlier.

Leave to appeal to the House of Lords was refused, but the two companies are thought likely to petition the Law Lords.

Unlike the other companies who won a 3G licence in last year's auction, Vodafone and Orange weren't expected to hand over their money in May 2000. This is because Vodafone was in the process of selling Orange, having agreed to take over Orange's parent company Mannesmann. Under the rules of the auction, no company could own two 3G licences, so both operators were allowed to pay up on 1 September instead.

Vodafone's winning bid for a 3G licence was nearly £6bn, while Orange won its licence for £4.1bn. BT and One2One paid £4.03bn and £4bn respectively. The auction raised a total of £22.5bn, with the licence for a new operator being awarded to Hutchison 3G for £4.38bn.

See the Mobile Technology News Section for full coverage.

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