'We won't profit from Live 8 texts', says O2

Mobile phone operator O2 has denied allegations it will make £7m in the text message lottery for tickets to the Live 8 concert in London's Hyde Park.

The company said an Evening Standard article that claimed the company would net 10p for every text message sent back to competition entrants was inaccurate.

O2 insisted it was merely the technology partner collecting the text messages. The mobile operator said it would charge 10p for replying to its customers but was not responsible for billing on other mobile networks. The company added that 3, Orange and Vodafone are charging 12p for every confirmation-of-entry text.

An O2 spokeswoman said: "We are making no money whatsoever from this exercise. We estimate our total net contribution to the event will be between £250,000 and £500,000. We are covering all the costs for running the text competition exercise.

"It's important to remember that each network operator is managing the relationship with their customers. While O2 is the overall technology partner, we are only dealing directly with our own customers."

O2 is expecting 70 million text entries for the competition for the concert, which will feature bands such as Muse, REM and U2. It said that the £1.50 fee was subject to VAT but is trying to recover this from HM Revenue and Customs. The remainder of the money will be split between three charities - Help a London Child, Live 8 and the Prince's Trust.

The Institute of Fundraising (IoF) said the 10p pricing strategy was cheaper than any previous text donation charges.

Lindsay Boswell, CEO of the IoF, said: "[We] have been campaigning for a while to get operators to lower their costs and treat charities as a special case. We don't expect them to waive all charges but equally we don't expect them to make a profit."

Arguments over the pricing strategy began on Friday, the same day Chancellor Gordon Brown offered to waive the concert's £500m VAT bill.