BT to fight on after losing case over 3G mobile licence fees

British Telecommunications has vowed to continue to fight the Government to try to recoup some £85m of lost interest payments after losing a legal battle over the timing of third-generation mobile phone licence payments.

The Court of Appeal yesterday rejected claims by both BT and One2One, owned by Deutsche Telekom, that the Government had treated them unfairly in forcing them to pay for their 3G mobile phone licences much earlier than rivals Vodafone and Orange.

"This is not the end of the matter," a BT spokesman said, adding: "We believe we have a good case."

He said BT would move quickly to either launch a fresh appeal, which it would have to do within 28 days, or to take the matter to the European courts.

One2One said it was considering appealing.

So far, 3G mobile phone services, which offer faster internet access and applications such as video over mobile, have been launched only in Japan. BT is due to launch the UK's first service when its trial on the Isle of Man begins next month.

BT and One2One claimed that the Government had acted unfairly and distorted competition in giving Vodafone and Orange extra time to come up with their payments. Vodafone and Orange, who paid their fees on 1 September rather than 9 May, were given longer to pay because Vodafone was in the process of selling Orange as part of its takeover of Germany's Mannesmann. At the time, the mobile phone auctions stated that a licence-winner could not hold more than one licence.

Last year, the UK government raised £22.5bn by auctioning five new mobile phone licences. Vodafone ended up with a £6bn bill while Orange, BT and One2One had to shell out around £4bn each. Hutchison 3G, a new entrant, had to pay around £4.4bn.