The Court of Appeal is this week hearing a case brought by BT
and One2One against the government over alleged unfairness during
the auction for third generation (3G) mobile phone operator
licences. The companies claim that the government gave rival
operators Vodafone and Orange a financial advantage.
BT and One2One claim they lost £80 million in interest payments
because the government required them to pay for the first
instalments of their multi-billion pound licence bids in May 2000,
four months earlier than both Vodafone and Orange, each of which
paid in September.
When the 3G auction took place last year, Vodafone owned
Mannesmann, the parent company of Orange. The auction rules
required that no single operator could own more than one licence.
Accordingly, although the government allowed both Vodafone and
Orange to win licences, the deal could not complete until Orange
had been sold to France Telecom, hence the four month delay in
payment. The government argues that the auction was “fair to all
parties and complied with all legal requirements.”
The appeal follows the High Court’s rejection of the claims from
BT and One2One in December last year.
