NTL warns of woe from Vodafone's overcharge claim
Vodafone is suing the troubled cable company NTL to claim back money it says it was overcharged.
Although Vodafone is a mobile phone operator, it needs to rent traditional telephone lines from companies like NTL, BT and Cable & Wireless as a part of its business.
But Vodafone has issued a claim to recover alleged "excess annual rent" paid and says it wants to reduce the amount it pays in the future.
Neither company would comment on the amount in dispute. However, NTL said in a filing made on Thursday to the US regulator the Securities and Exchange Commission that if Vodafone is successful "it could have an adverse effect on NTL's financial position".
Rental to mobile operators make up a significant chunk of NTL's business division, which reported revenues of $226m (£143m) in the third quarter of this year.
NTL is currently in Chapter 11 bankruptcy proceedings in the US after struggling under a $20bn debt mountain that has now been cut in half.
But credit-rating agencies have warned that the company could still struggle when it emerges from Chapter 11.
"We can confirm that a statement of claim has been issued," said a spokesperson for Vodafone.
"We are in discussions with Vodafone. We believe the claim is without merit," said a spokeswoman for NTL, who added that the company was hopeful it would resolve the dispute.
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