Legal threat to mobile auction

Vodafone's rivals say it has been given an unfair advantage

Mobile phone operator One2One has confirmed it is to take legal action against the way the auction for the next-generation mobile phone licences was run.

Auction results

Licence A:

TIW £4.3847bn

Licence B:

Vodafone Airtouch £5.964bn

Licence C:

BT £4.03bn

Licence D:

One2One £4.003bn

Licence E:

Orange £4.095bn

One2One has confirmed it is taking High Court action against a Department of Trade and Industry decision to allow Vodafone AirTouch to delay payment for its licence by up to 180 days.

The £22.47bn ($35.4bn) auction saw Vodafone emerge with the strongest licence of those available to existing players.

But One2One - and reportedly BT - are seeking judicial review of the DTI decision which they believe could be worth £360m in interest savings to Vodafone.

The waiver was granted to avoid handicapping Vodafone or Orange after Vodafone acquired Orange through its takeover of Mannesmann of Germany.

Vodafone had undertaken to sell or demerge Orange to gain permission for the takeover but did not have time before the start of the next-generation mobile auction.

The DTI then granted the waiver to save Vodafone - which is poised to sell Orange - from having to pay for both the licence it bought in the auction and the licence acquired by Orange.

'Unfair situation'

The first payment date for One2One, BT and TIW - the US-Canadian company which scooped the best licence - is on 9 May.

One2One, which will pay the full £4bn cost of its licence straight away, wants to keep earning interest on the money until Vodafone has paid up.

Unless the DTI compromises, One2One said its payment would be accompanied by a writ seeking judicial review.

BT, which paid £4.03bn for its licence is also believed to have made suggestions as to how each licence winner should be equally treated.