One2One wins battle with DTI

One2One has won a High Court victory over the UK government, overturning the DTI's (Department of Trade and Industry) amendments to the terms and conditions of next-generation wireless network licences.

In May, the DTI said operators wanting to bid for a licence would have to allow a new entrant to 'piggy-back' on their networks. But One2One, backed by rival Orange, claimed the move transgressed the 1984 Telecoms Act, which states that any changes to licence conditions must first go before the Monopolies and Mergers Commission (now called the Competition Commission).

One2One hailed the ruling as a victory for all mobile operators. The firm's senior regulatory counsel, Phil Reynolds, said: "Operators now have the certainty and comfort that licences can't be modified by a decision or subordinate legislation under another act different from that which they obtained it."

But Ted Mercer, head of the IT/telecoms law group at Taylor Joynson Garrett, said this is not a good ruling for UK businesses.

He said: "Either the DTI will have to find some clever statutory way of getting around it, or it is going to have to go through the usual procedure. If that doesn't work out in terms of gaining all four operators' consent, it will go to the Competition Commission, which will take a minimum of six months to get through it.

"Either way, it looks as if the bidding process will be delayed, and this will put the UK at the back of the race for UMTS (Universal Mobile Telecommunications Service) roll-out," he said.

A DTI spokesman said the government will now consider its options, but admitted: "This may well delay the roll-out of UMTS."

One2One's Reynolds disagreed: "This need not delay the auction at all it could proceed without the roaming condition." He added that there are good commercial incentives for operators to allow roaming anyway.

One2One has faced criticism that their ultimate aim was to stall the process, given that it is in the throws of gaining new investment - either through flotation or by finding a buyer. On Friday, Deutsche Telekom confirmed it has agreed to buy the UK mobile operator for £8.4bn.