Vodafone may take legal action as Germany backs 3G cost-sharing

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Vodafone is considering whether to instigate legal action against the German government after the country's telecoms regulator said it would allow the six third generation mobile phone licence winners to share the infrastructure costs of the new networks.

The UK mobile phone operator warned last week that it reserved the right to sue if the conditions of the 3G licences awarded in Germany were changed. Many mobile phone companies in Europe have been lobbying hard for network sharing after the heavy costs of 3G licences have left them under severe financial strain.

While RegTP, the German regulator, said yesterday that the terms of the licences would not be changed, it insisted that shared use of sites, masts, antennas and cables was permitted under current conditions.

A spokesman for Vodafone said: "We're having a look at the announcement and we're still deciding what our position is."

However, the mobile operator is thought to want clarification that the licence conditions have definitely not changed. If the terms have changed, Vodafone will be keen to ascertain if the other operators have an "unfair competitive advantage".

The German regulator said yesterday that it "need issue no new determinations" and was "simply giving all concerned some help in interpreting the situation, based on the existing licence terms."

The six winners spent 50bn euros (£30bn) on the licence. They include Deutsche Telekom's T-Mobil, BT's Viag Interkom, France Telecom's MobilCom, Mannesmann, Dutch group E-Plus and Group 3G. MobilCom said yesterday that it expected savings of up to 4bn Deutschmarks (£1.2bn) from cooperation.

Last month, Orange, Vodafone and Hutchison Whampoa said they would invest jointly in 3G equipment in Sweden.