Court rejects '3G payment delays' claim

UK Court of Appeal judges today [Wednesday] ruled against BT and One2One's claim that allowing rival operators more time to settle third-generation (3G) bills amounted to unfair government aid.

The Government allowed Vodafone and Orange extra time, some 180 days, to settle their multi-billion pound bills, saving millions in interest. BT and One2One claimed the decision effectively cost them around £85m.

But Court of Appeal judge Lord Philips said the way the matter was handled had not given Vodafone and Orange an unfair advantage.

"Any difference of treatment that had occurred was objectively justified," he said. "The conduct of the Secretary of State was not unfair, irrational or unreasonable in any way."

The two firms were given an extension because Vodafone was in the process of selling Orange as part of its takeover of Orange's then owner, Germany's Mannesmann. UK auction rules forbid one firm from owning two licences.

Separately, the French Government has slashed the cost of its 3G licences in the face of rebellion from Vivendi Universal, one the current licence holders, and difficulty in selling its two remaining licences.

Shares in Vivendi and France Telecom soared by 12 and 15 per cent respectively on the news.